Univ.of  111.  Library 
51 

£/  30 


APPALACHIAN  POWER  COMPANY 

WITH 

THE  NEW  YORK  TRUST  COMPANY, 

T rustee 


Indenture 


Dated  A ugust  1 , 1921 


SECURING  AN  ISSUE  OF  FIFTEEN-YEAR  7%  SECURED 
GOLD  BONDS  DUE  1936 


T'fcve  Ereotnc  Pott  Job  Printing  Office,  inc..  in4  Fulton  St..  N.  I. 


Digitized  by  the  Internet  Archive 
in  2017  with  funding  from 

University  of  Illinois  Urbana-Champaign  Alternates 


https://archive.org/details/appalachianpowerOOappa 


C3)10  3tl DcntUtC,  dated  the  first  day  of  August, 
one  thousand  nine  hundred  and  twenty-one,  between 
Appalachian  Power  Company  (hereinafter  called  the 
“Company”),  a corporation  organized  and  existing  under 
the  Laws  of  the  State  of  Virginia,  party  of  the  first  part, 
and  The  New  York  Trust  Company  (hereinafter  called 
the  “Trustee”),  a corporation  organized  and  existing 
under  the  Laws  of  the  State  of  New  York,  party  of  the 
second  part, 

WITNESSETH  That 

Whereas  the  Company  heretofore  authorized  and 
made  an  issue  of  Six  Million  Dollars  ($6, 000, 000)  prin- 
cipal amount  of  General  Mortgage  Seven  Per  Cent.  Gold 
Bonds,  all  dated  August  1,  1921,  maturing  August  1, 
1936,  and  all  equally  secured  by  a mortgage  or  trust  deed 
dated  August  1,  1921  (hereinafter  called  the  General 
Mortgage),  made  by  the  Company  to  The  New  York 
Trust  Company  and  Frederick  J.  Horne,  as  Trustees ; and 

Whereas  the  Company  having  full  and  complete 
authority  in  the  premises,  has  resolved  to  issue  and  to 
dispose  of,  as  hereinafter  stated,  its  secured  gold  bonds 
secured  by  a pledge  of  all  of  said  bonds,  hereinafter  called, 
collectively,  “pledged  bonds” ; and 

Whereas  the  Company  has  resolved  that  such  bonds 
shall  be  executed  in  its  name  and  under  its  seal  by  its 
President  or  a Vice-President  and  by  its  Treasurer  or  an 
Assistant  Treasurer,  and  that,  before  issuance  and  de- 
livery thereof,  each  of  such  bonds  shall  be  authenticated 
by  a certificate  of  the  Trustee  to  the  effect  that  such  bond 
is  one  of  the  bonds  described  in  this  Indenture ; and 


2 


Whereas  such  bonds  of  the  Company  are  to  he  for 
the  aggregate  principal  sum  of  $5,000,000,  payable  to 
the  bearer,  or  if  registered  to  the  registered  holder,  in 
gold  coin  of  the  United  States  of  America  of  the  present 
standard  of  weight  and  fineness  at  the  office  of  The  New 
York  Trust  Company  in  the  City  of  New  York,  and  are 
to  be  issued  in  three  denominations,  viz.,  for  $1,000,  $500 
and  $100  each,  respectively,  all  to  be  dated  August  1, 
1921,  and  to  mature  August  1,  1936,  all  bearing  interest 
from  August  1,  1921,  evidenced  by  coupons  payable  to 
bearer  on  the  first  day  of  August  and  the  first  day  of 
February,  respectively,  for  $35,  for  $17.50,  and  for  $3.50, 
attached  to  said  respective  denominations  of  bonds,  which 
coupons  are  to  be  payable  at  the  office  of  said  The  New 
York  Trust  Company,  in  like  gold  coin;  and 

Whereas  the  text  of  the  bonds  for  $1,000  and  of  the 
coupons  to  be  annexed  thereto,  is  to  be  substantially  to 
the  following  effect,  and  the  text  of  the  bonds  for  $500 
and  appurtenant  coupons  and  of  the  bonds  for  $100  and 
appurtenant  coupons  is  to  be  of  like  tenor,  except  as  to 
amount,  to  wit : 


[form  of  bond.] 

No.  M $1,000. 

UNITED  STATES  OF  AMERICA, 

State  of  Virginia. 

APPALACHIAN  POWER  COMPANY, 
Fifteen-Year  7%  Secured  Gold  Bond. 

Appalachian  Power  Company,  a corporation  organ- 
ized and  existing  under  the  laws  of  the  State  of  Virginia 
(hereinafter  called  “Company”),  for  value  received, 
hereby  promises  to  pay  to  bearer,  or,  if  registered,  to  the 


registered  holder  hereof,  on  the  first  day  of  August,  1936, 
the  sum  of  One  Thousand  Dollars,  at  the  office  of  The 
New  York  Trust  Company,  in  the  City  of  New  York,  in 
gold  coin  of  the  United  States  of  America  of  the  present 
standard  of  weight  and  fineness,  and  to  pay  interest 
thereon  from  August  1,  1921,  at  the  rate  of  seven  per 
centum  (7%)  per  annum,  semi-annually,  on  the  first  day 
of  February  and  the  first  day  of  August  in  each  year, 
according  to  the  tenor  and  effect  of  the  coupons  hereto 
annexed,  but  only  upon  presentation  and  surrender  of  the 
said  coupons  as  they  severally  mature. 

The  Company  will  pay  both  the  principal  and  interest 
of  this  Bond  without  deduction  for  any  tax  or  taxes 
(except  succession  and  inheritance  taxes  and  except  such 
portion  of  any  Federal  income  tax  with  respect  to  income 
derived  from  such  interest  as  shall  be  in  excess  of  two  per 
cent.)  which  the  Company  or  the  Trustee  under  the 
Indenture  hereinafter  mentioned  may  be  authorized  or 
required  to  pay  thereon  or  to  retain  therefrom  under  any 
present  or  future  law  or  requirement  of  the  United  States 
of  America,  or  of  any  state,  county  or  municipality 
therein,  the  Company  hereby  agreeing  to  pay  such  tax  or 
taxes. 

It  is  provided  in  said  Indenture,  that  the  Company 
will  reimburse  to  the  holder  or,  if  this  Bond  be  registered, 
to  the  registered  owner  hereof,  the  Pennsylvania  personal 
property  tax  which  may  be  imposed  upon  this  Bond  or 
upon  such  holder  or  registered  owner  by  reason  of  his 
ownership  hereof,  not  exceeding  four  (4)  mills  per  annum 
on  each  dollar  of  the  face  amount  hereof,  if  application 
therefor  be  made  as  provided  in  said  Indenture. 

This  Bond  is  one  of  an  authorized  issue  of  bonds  of 
the  Company  known  as  its  Fifteen-Year  7%  Secured  Gold 
Bonds  (hereinafter  called  Secured  Bonds),  of  an  aggre- 
gate principal  amount  not  exceeding  $5,000,000  at  any 


4 


one  time  outstanding,  issued  and  to  be  issued  under  and  in 
pursuance  of,  and  all  equally  and  ratably  secured  by,  an 
Indenture  dated  August  1,  1921,  duly  executed  and  de- 
livered by  the  Company  to  The  New  York  Trust  Com- 
pany, as  Trustee,  pledging  to  and  with  said  Trustee 
certain  General  Mortgage  Bonds  of  the  Company  therein 
described.  For  a description  of  the  General  Mortgage 
Bonds  mortgaged  and  pledged,  the  nature  and  extent  of 
the  security,  the  rights  of  the  holders  of  Secured  Bonds 
and  of  the  Trustee  in  respect  to  said  security,  and  the 
terms  and  conditions  upon  which  the  Secured  Bonds  are 
and  are  to  be  issued  and  secured,  reference  is  made  to 
said  Indenture,  to  all  of  which  provisions  the  holder 
hereof  by  accepting  this  Secured  Bond  assents. 

The  principal  of  this  Secured  Bond  and  of  all  other 
bonds  of  this  issue  may  be  declared,  and  thereupon  shall 
become  and  be,  due  and  payable  immediately  and  prior  to 
August  1,  1936,  in  the  event  of  default  as  in  said  In- 
denture provided. 

This  Secured  Bond  shall  pass  by  delivery  unless  it  is 
registered  in  the  holder’s  name  on  the  books  of  the  Com- 
pany at  said  The  New  York  Trust  Company  in  the  City 
of  New  York  and  such  registration  is  noted  hereon  by  the 
registrar.  After  such  registration,  no  transfer  shall  be 
valid  unless  made  by  the  registered  holder,  in  person  or 
by  attorney,  and  similarly  noted  hereon  by  such  registrar; 
but  this  Secured  Bond  may  be  discharged  from  registry 
and  its  transferability  by  delivery  be  restored,  by  like 
transfer  to  bearer  noted  hereon,  after  which  it  may  again 
from  time  to  time  be  registered  or  made  transferable  to 
bearer  as  before.  Such  registration,  however,  shall  not 
affect  the  negotiability  of  the  coupons,  which  shall  con- 
tinue to  be  transferable  by  delivery  merely. 

As  is  more  fully  set  forth  in  said  Indenture,  to  which 
reference  is  hereby  made,  no  recourse  shall  be  had  for  the 


5 


payment  of  the  principal  or  interest  of  this  Secured  Bond 
against  any  incorporator,  stockholder,  officer  or  director 
of  the  Company. 

This  Secured  Bond  shall  not  become  or  be  obligatory 
for  any  purpose  until  the  certificate  of  authentication 
endorsed  hereon  shall  have  been  signed  by  the  Trustee. 
Such  certificate  shall  be  conclusive  evidence  that  this  Se- 
cured Bond  is  one  of  the  Secured  Bonds  issued  under 
said  Indenture,  and  is  entitled  to  all  the  benefits  thereof. 

In  witness  whereof,  Appalachian  Power  Company 
lias  caused  this  Bond  to  be  signed  by  its  President  or  a 
Vice-President  and  by  its  Treasurer  or  an  Assistant 
Treasurer,  and  its  corporate  seal  to  be  hereunto  affixed 
this  1st  day  of  August,  A.  D.  1921. 

Appalachian  Power  Company, 

By 


President. 

Treasurer. 


[form  of  interest  coupon.] 

No $35. 

On  the  first  day  of  , 19  , Appalachian 

Power  Company  will  pay  to  bearer  at  the  office  of  The 
New  York  Trust  Company,  in  the  City  of  New  York, 
Thirty-five  Dollars,  United  States  Gold  Coin  of  the 
standard  of  weight  and  fineness  existing  on  August  1, 
1921,  without  deduction  for  taxes  as  specified  in  said 
bond,  being  six  months’  interest  then  due  on  its  Fifteen- 
Year  7%  Secured  Gold  Bond,  No. 


Treasurer. 


a 


And  whereas,  On  each  of  said  bonds  there  is  to  be 
endorsed  a certificate  of  the  Trustee,  substantially  of  the 
following  tenor,  to  wit: 

[form  of  trustee’s  certificate.] 

This  bond  is  one  of  the  bonds  referred  to  in  the  within 
mentioned  Indenture. 

The  New  York  Trust  Company,  Trustee, 

By 


Assistant  Secretary. 

And  whereas,  Each  of  the  coupons  to  be  attached  to 
said  bonds  is  to  be  authenticated  by  the  engraved  fac- 
simile signature  of  the  present  Treasurer  or  of  any 
future  Treasurer  of  the  Company,  and  for  that  purpose 
the  Company  may  adopt  and  may  use  the  engraved  fac- 
simile signature  of  any  person  who  shall  have  been  such 
Treasurer,  notwithstanding  the  fact  that  he  shall  have 
ceased  to  be  such  Treasurer  at  the  time  when  any  such 
bond  shall  be  actually  certified  and  delivered;  and 

Whereas,  The  Company  has  resolved  that  the  Iden- 
ture  to  secure  the  said  bonds  shall  be  substantially  in  the 
form  of  this  Indenture;  and 

Whereas,  All  things  necessary  to  make  such  bonds, 
when  certified  by  the  Trustee,  the  valid,  binding  and  legal 
obligations  of  the  Company,  and  these  presents  a valid 
indenture  of  pledge  to  secure  and  to  provide  for  the  pay- 
ment of  the  said  bonds,  have  been  done  and  performed 
and  have  happened,  and  the  execution  and  issue  of  said 
bonds  and  of  this  Indenture  have  been  in  all  respects  duly 
authorized. 


7 


Now,  Therefore,  This  Indenture  Witnesseth  : 

That  in  order  to  secure  the  payment  of  the  principal 
and  interest  of  all  of  said  bonds  at  any  time  issued  and 
outstanding  under  this  Indenture,  according  to  the  tenor, 
purport  and  effect  thereof,  and  to  secure  the  performance 
and  observance  of  all  the  covenants  and  conditions  herein 
contained,  and  to  declare  the  terms  and  conditions  on 
which  said  bonds  are  issued,  received  and  held,  and  in 
consideration  of  the  premises  and  of  the  purchase  and 
acceptance  of  such  bonds  by  the  holders  thereof,  and  of 
the  sum  of  one  dollar  to  it  duly  paid  by  the  Trustee  at  the 
execution  of  these  presents,  the  receipt  whereof  is  hereby 
acknowledged ; 

The  Company  hereby  does  sell,  assign,  transfer  and 
set  over  and  does  pledge  to,  and  hypothecate  with  The 
New  York  Trust  Company,  as  Trustee,  the  following  de- 
scribed mortgage  bonds,  hereinbefore  and  hereinafter 
called  the  “pledged  bonds,”  contemporaneously  with  the 
delivery  of  this  Indenture  delivered  to  the  Trustee,  to  wit : 

General  Mortgage  Seven  Per  Cent.  Gold  Bonds 
of  the  Company  for  the  aggregate  principal  amount 
of  Six  Million  Dollars  ($6,000,000),  dated  August 
1,  1921,  maturing  August  1,  1936,  bearing  interest 
at  the  rate  of  seven  per  cent,  per  annum  from 
August  1,  1921,  and  issued  under  and  secured  by 
said  General  Mortgage  dated  August  1,  1921,  made 
by  the  Company  to  said  The  New  York  Trust  Com- 
pany and  Frederick  J . Horne,  as  Trustees; 

To  have  and  to  Hold  the  same  unto  the  said  The  New 
York  Trust  Company,  as  Trustee,  its  successors  and 
assigns,  forever: 

In  Trust,  Nevertheless,  for  the  equal  and  ratable 
use  and  benefit  of  all  present  and  future  holders  of  the 


8 


bonds  issued  and  to  be  issued  under  and  secured  by  this 
Indenture,  without  preference,  priority  or  distinction  as 
to  lien  or  otherwise  of  one  bond  over  any  other  bond  by 
reason  of  priority  in  the  issue,  sale  or  negotiation  thereof 
or  otherwise;  so  that  each  and  every  bond  issued  as 
aforesaid  shall  have  the  same  right,  lien  and  privilege 
under  and  by  virtue  of  this  Indenture,  and  so  that 
subject  to  the  terms  hereof,  the  principal  and  interest 
of  every  such  bond  shall  be  secured  hereby  equally  and 
proportionately,  as  though  all  had  been  duly  issued,  sold 
and  negotiated  simultaneously  with  the  execution  and 
delivery  of  this  Indenture;  it  being  intended  that  the 
lien  and  security  of  this  Indenture  shall  take  effect  from 
the  day  of  the  date  hereof,  without  regard  to  the  date 
of  the  actual  issue,  sale  and  negotiation  of  said  bonds, 
and  as  though  upon  such  date  all  of  said  bonds  had  been 
actually  sold  and  delivered  to  and  into  the  hands  of  the 
holders  thereof  for  value;  and  it  being  expressly  cove- 
nanted and  declared  by  the  Company  that  all  such  bonds 
are  to  be  issued,  negotiated,  sold  and  held,  and  that  the 
said  pledged  bonds  are  to  be  held  by  the  Trustee  upon 
and  subject  to  the  further  trusts,  uses,  conditions,  cove- 
nants and  agreements,  hereinafter  set  forth;  and  it  is 
covenanted  between  the  parties  hereto  and  for  the  benefit 
of  the  respective  holders  from  time  to  time  of  the  bonds 
intended  to  be  secured  hereby,  as  follows,  viz. : 

ARTICLE  ONE. 

Section  1.  The  amount  of  bonds  which  may  be  exe- 
cuted by  the  Company  and  certified  by  the  Trustee  here- 
under is  limited,  so  that  never  at  any  time  shall  there  be 
outstanding  bonds  hereby  secured  for  an  aggregate  prin- 
cipal amount  exceeding  $5,000,000. 

The  said  bonds  and  the  coupons  thereto  attached  re- 
spectively shall  be  substantially  of  the  tenor  and  purport 


9 


above  recited.  The  bonds  issued  from  time  to  time  shall 
be  for  such  amounts  of  the  respective  denominations  here- 
inbefore recited  as  may  be  determined  from  time  to  time 
by  resolution  of  the  Board  of  Directors  or  Executive  Com- 
mittee of  the  Company.  The  bonds  of  the  denomination 
of  $1,000  shall  be  numbered  M-l  and  consecutively  up- 
wards. The  bonds  of  the  denomination  of  $500  shall  be 
numbered  D-l  and  consecutively  upwards,  and  the  bonds 
of  the  denomination  of  $100  shall  be  numbered  C-l  and 
consecutively  upwards. 

Only  such  bonds  as  shall  bear  thereon  a certificate, 
substantially  in  the  form  hereinbefore  recited,  duly  exe- 
cuted by  the  Trustee,  shall  be  secured  by  this  Indenture 
or  entitled  to  any  lien  or  benefit  hereunder.  Every  such 
certificate  of  the  Trustee  upon  any  bond  executed  by  the 
Company  shall  be  conclusive  evidence,  and  the  only  evi- 
dence, that  the  bond  so  certified  was  duly  issued  here- 
under and  is  entitled  to  the  benefit  of  the  trust  hereby 
created  for  the  benefit  of  the  holder  of  such  bond. 

Sec.  2.  In  case  any  of  the  officers  who,  on  behalf  of 
the  Company,  shall  have  signed  any  of  the  bonds  issued 
under  this  Indenture,  shall  die  or  shall  cease  to  be  such 
officers  of  the  Company,  before  the  bonds  so  signed  shall 
have  been  actually  certified  by  the  Trustee  or  delivered 
or  sold,  nevertheless  upon  the  request  of  the  Company, 
such  bonds  shall  be  certified  and  delivered,  as  herein  pro- 
vided, and  may  be  sold  or  otherwise  disposed  of  by  the 
Company,  as  though  the  persons  who  signed  and  sealed 
such  bonds  had  not  died  or  ceased  to  be  such  officers  of  the 
Company ; and  also  any  such  bond  may  be  signed  in  behalf 
of  the  Company  by  such  persons  as  at  the  actual  date  of 
the  execution  of  the  bond  shall  be  the  proper  officers  of 
the  Company,  although  on  August  1,  1921,  any  such  per- 
son shall  not  have  been  such  officer.  The  coupons  at* 


10 


tached  to  the  bonds  hereby  secured  shall  be  authenticated 
by  the  engraved  facsimile  signature  of  the  present  treas- 
urer, or  of  any  future  treasurer  of  the  Company,  and  for 
that  purpose  the  Company  may  adopt  and  use  the 
engraved  facsimile  signature  of  any  treasurer,  notwith- 
standing the  fact  that  at  the  time  when  such  bonds  shall 
be  actually  certified  and  delivered  or  sold  he  shall  have 
ceased  to  be  the  treasurer  of  the  Company. 

Sec.  3.  In  case  any  bond  secured  hereby  or  the  cou- 
pons thereto  appertaining  shall  become  mutilated  or  be 
destroyed  or  lost,  the  Company  may  execute,  and,  upon 
its  request  the  Trustee  shall  certify  and  deliver,  a new 
bond  of  like  tenor  and  date  and  for  a like  amount  (includ- 
ing coupons  for  interest  thereon)  bearing  the  same  serial 
number,  in  exchange  and  substitution  for  and  upon  can- 
cellation of  the  mutilated  bond  and  its  coupons,  or  in 
lieu  of  and  in  substitution  for  the  same  so  destroyed 
or  lost.  In  case  of  destruction  or  loss  the  applicant 
for  a substituted  bond  and  coupons  shall  furnish  to  the 
Company  and  to  the  Trustee  evidence  to  their  satisfac- 
tion, in  their  discretion,  of  the  destruction  or  loss  of 
such  bond  and  its  coupons,  and  also  such  security  or 
indemnity  as  shall  be  required  by  the  Company  and  the 
Trustee. 

Sec.  4.  Nothing  in  this  Indenture  or  in  the  bonds 
secured  hereby  expressed  or  implied,  is  intended,  or  shall 
be  construed,  to  give  to  any  person,  firm,  or  corporation, 
other  than  the  parties  hereto  and  the  holders  of  said 
bonds,  any  legal  or  equitable  right,  remedy  or  claim  under 
or  in  respect  of  this  Indenture,  or  under  any  covenant, 
condition  or  provision  herein  contained ; all  its  covenants, 
conditions  and  provisions  being  intended  to  be,  and  being, 
for  the  sole  and  exclusive  benefit  of  the  parties  hereto, 
and  of  the  holders  of  the  bonds  issued  hereunder. 


11 


Sec.  5.  Pending  the  preparation  of  the  permanent 
bonds  the  Company  may  issue  and  the  Trustee  may  in 
the  same  manner  as  herein  provided  in  respect  of  the 
permanent  bonds  certify  and  deliver  temporary  printed 
bonds  substantially  of  the  tenor  of  the  coupon  bonds  here- 
inbefore recited  in  denominations  of  .$1,000  or  such  mul- 
tiples of  $1,000  as  the  Company  may  deem  expedient,  and 
with  or  without  coupons;  such  bonds  shall  be  exchange- 
able for  a like  principal  amount  of  permanent  bonds 
and  when  exchanged  shall  then  be  cancelled,  and  holders 
of  such  temporary  bonds  shall  until  the  same  be  so 
exchanged  be  bondholders  within  the  meaning  of  this 
Indenture  entitled  to  the  benefits  of  the  trusts  hereby 
created. 

Sec.  6.  Permanent  bonds  of  one  denomination  shall  be 
exchangeable  for  an  equal  aggregate  principal  amount  of 
bonds  of  any  of  the  other  denominations  upon  payment 
to  the  Trustee  for  account  of  the  Company  of  the  sum 
of  One  Dollar  ($1.00)  for  each  new  bond  issued  upon 
such  exchange. 


ARTICLE  TWO. 

Section  1.  Bonds  up  to  an  aggregate  principal  amount 
of  $2,500,000  shall  be  authenticated  and  delivered  by  the 
Trustee  upon  the  order  of  the  Company  signed  by  its 
President  or  a Vice-President  with  its  corporate  seal 
affixed  and  attested  by  its  Secretary  or  an  Assistant 
Secretary,  after  the  delivery  to  the  Trustee  of  the  afore- 
said $6,000,000  principal  amount  of  General  Mortgage 
Bonds  to  be  pledged  hereunder,  without  any  further  act 
on  the  part  of  the  Company  and  whether  or  not  the  afore- 
said General  Mortgage  shall  then  have  been  recorded  or 
filed. 


12 


Sec.  2.  The  First  Mortgage  Trust  Deed  of  the  Com- 
pany, dated  June  1st,  1911,  to  Continental  and  Com- 
mercial Trust  and  Savings  Bank,  an  Illinois  corporation, 
as  trustee  (hereinafter  called  the  First  Mortgage,  the 
bonds  secured  by  which  are  hereinafter  called  First  Mort- 
gage Bonds),  provides  that  the  remaining  bonds  not  yet 
certified  and  issued  under  said  First  Mortgage  shall  from 
time  to  time  be  executed  by  the  Company  and  certified  by 
the  trustee  under  said  First  Mortgage  to  an  amount  not 
exceeding  in  the  aggregate  80%  of  the  reasonable  value 
(not  to  exceed  the  actual  cost)  to  the  Company  of  addi- 
tional plants  and  properties,  additional  hydro-electric 
developments  or  permanent  extensions,  additions,  im- 
provements or  betterments,  subject  to  certain  provisions 
and  limitations.  It  is  the  intention  of  this  Indenture  to 
permit  the  issue  of  additional  bonds  hereunder,  being 
bonds  in  addition  to  the  principal  amount  of  $2,500,000 
above  referred  to,  from  time  to  time  to  an  amount  not 
exceeding  in  the  aggregate  the  remaining  20%  of  the  rea- 
sonable value  (not  to  exceed  the  actual  cost)  to  the  Com- 
pany of  such  additional  property,  as  provided  by  the 
following  sections  of  this  Article. 

Sec.  3.  The  $2,500,000  principal  amount  of  additional 
bonds,  that  is  bonds  in  addition  to  said  $2,500,000  prin- 
cipal amount  of  bonds  to  be  issued  under  the  provisions 
of  Section  1 of  this  Article,  shall  from  time  to  time  be 
authenticated  by  the  Trustee  and  delivered  to  the  Com- 
pany upon  its  written  order  signed  in  the  name  of  the 
Company  by  its  President  or  a Vice-President,  with  its 
corporate  seal  affixed  and  attested  by  its  Secretary  or  an 
Assistant  Secretary,  in  each  case  for  a principal  amount 
or  principal  amounts  not  exceeding  in  the  aggregate  20% 
of  the  reasonable  value  (not  to  exceed  the  actual  cost)  to 
the  Company  of  ( 1 ) any  additional  plants  and  properties 


13 


(not  including  bonds,  stocks  and  other  securities)  ac- 
quired by  the  Company  after  September  1,  1921;  (2) 
any  additional  hydro-electrical  developments  made  by 
the  Company  after  said  date;  or  (3)  any  permanent 
extensions,  additions,  improvements  or  betterments  made 
after  September  1,  1921  to  any  of  the  Company’s  plants 
or  properties  as  they  existed  on  said  date;  (such  addi- 
tional plants  and  properties,  hydro-electrical  develop- 
ments and  permanent  extensions,  additions,  improve- 
ments and  betterments  being  hereinafter  referred  to  as 
“additional  property”)  ; provided,  however, 

That  none  of  said  additional  bonds  shall  be  so  certified 
and  delivered  under  the  provisions  of  this  Section  on 
account  of  such  repairs  and  renewals  as  shall  be  neces- 
sary to  keep  the  Company’s  plants  and  properties  in  good 
order,  and  to  offset  depreciation  in  the  physical  condition 
thereof;  and  provided  further 

That  none  of  said  additional  bonds  shall  be  so  certified 
or  delivered  under  the  provisions  of  this  Section  unless 
and  until  the  gross  earnings  of  the  Company  from  the 
operation  of  its  plants  and  properties  and  from  income 
upon  any  securities  owned  by  the  Company  (ex- 
clusive of  obligations  of  the  Company)  for  a period 
of  twelve  (12)  consecutive  calendar  months  within 
the  fifteen  (15)  consecutive  calendar  months  imme- 
diately prior  to  the  date  of  each  respective  applica- 
tion for  certification,  after  deducting  from  such  gross 
earnings  all  operating  expenses  for  the  same  period, 
including  taxes,  insurance  premiums  and  customary 
expenses  for  current  repairs  and  current  maintenance 
ordinarily  chargeable  to  operating  expenses,  shall  have 
been  in  each  case  equal  to  at  least  twice  the  aggregate 
amount  of  (a)  the  annual  interest  charges  on  (1)  all 
First  Mortgage  Bonds  outstanding  at  the  time  of  said 
application  and  (2)  all  additional  First  Mortgage  Bonds 


14 


issuable  on  account  of  any  additional  property  acquired 
prior  to  the  termination  of  said  period  of  twelve  (12) 
months  and/or  on  account  of  the  same  additional  prop- 
erty on  account  of  which  bonds  are  then  to  be  certified 
hereunder  (but  not  including  any  First  Mortgage  Bonds 
certified  but  still  withheld  from  delivery  by  the  Trustee 
under  the  First  Mortgage  on  account  of  existing  liens  on 
property  acquired  by  the  Company  as  provided  in  Sec- 
tion 7 of  Article  I of  said  First  Mortgage  and  in  Section  7 
of  this  Article  of  this  Indenture)  and  ( b ) the  annual 
interest  charges  on  (1)  all  bonds  hereby  secured  and 
then  outstanding  and  (2)  all  bonds  whose  certification 
and  delivery  is  then  applied  for  hereunder,  and  (e)  the 
annual  interest  charges  on  (1)  all  secured  indebtedness 
of  the  Company  and  charges  against  its  properties  exist- 
ing at  the  time  of  said  application,  the  lien  or  liens  of 
which  shall  be  prior  to  the  lien  securing  the  pledged 
bonds;  and  (2)  all  secured  indebtedness  against  any  new 
or  additional  plant  or  property  the  earnings  of  which 
are  included  in  computing  the  earnings  of  the  Company 
for  the  purpose  of  obtaining  the  certification  and  deliv- 
ery of  bonds  hereunder  as  provided  in  Section  4 of  this 
Article,  the  lien  or  liens  of  which  indebtedness  will  be 
prior  to  the  lien  securing  the  pledged  bonds,  after  such 
plant  or  property  shall  have  been  acquired  by  the  Com- 
pany. 


Sec.  4.  In  case  the  Company  shall  at  any  time  after 
September  1,  1921  apply  under  the  provisions  of  Sec- 
tion 3 of  this  Article  for  the  certification  and  delivery  of 
any  bonds  hereunder  on  account  of  any  new  or  additional 
plants  or  properties,  acquired  by  the  Company  after 
September  1,  1921,  and  having  at  the  time  of  such  appli- 
cation an  earning  capacity,  (but  not  including  bonds, 
stocks  and  other  securities),  the  Company  shall  have  the 


15 


right  in  computing  its  earnings  for  the  purpose  of  ob- 
taining the  certification  and  delivery  of  bonds  under  the 
terms  and  provisions  of  Section  3 of  this  Article,  to 
include  the  gross  earnings  made  by  such  new  plant  or 
property  so  proposed  to  be  purchased  or  acquired  for  said 
period  of  twelve  (12)  consecutive  calendar  months  within 
the  fifteen  (15)  consecutive  calendar  months  imme- 
diately prior  to  such  application,  after  deducting  from 
such  gross  earnings  all  operating  expenses  for  the  same 
period,  including  taxes,  insurance  premiums  and  cus- 
tomary expenditures  for  current  repairs  and  current 
maintenance  ordinarily  chargeable  to  operating  expenses. 

Sec.  5.  Every  written  order  of  the  Company  for  the 
certification  and  delivery  of  any  of  the  bonds  referred  to 
and  covered  by  Section  3 of  this  Article  shall  be  accom- 
panied by 

(1)  A certified  copy  of  a resolution  of  the  Board  of 
Directors  or  Executive  Committee  of  the  Company  au- 
thorizing such  order  and  specifying  the  amount  and  de- 
nominations of  bonds  to  be  certified  and  delivered. 

(2)  a certificate  signed  by  some  engineer,  approved  by 
the  Trustee  as  an  engineer  of  good  standing  and  reputa- 
tion, who  may  be  an  engineer  in  the  employ  of  the  Com- 
pany (and  the  certificate  of  any  engineer  approved  by  the 
Trustee  under  the  Company’s  First  Mortgage  shall  be 
accepted  under  the  provisions  of  this  Section)  stating: 

(a)  That  expenditures  for  additional  property 
of  the  nature  described  in  the  first  paragraph  of 
Section  3 of  this  Article  have  actually  been  made 
or  contracted  for  or  materials  purchased  or  con- 
tracted for,  together  with  a description  thereof  in 
reasonable  detail ; 


16 


(b)  The  actual  cost  thereof  to  the  Company; 

( c ) The  reasonable  value  thereof  to  the  Com- 
pany ; 

(d)  That  the  additional  property  or  the  per- 
manent extensions,  improvements,  additions  or  bet- 
terments on  account  of  which  any  instalment  of 
bonds  is  to  be  certified  have  not  been  acquired  in 
whole  or  in  part  with  First  Mortgage  Bonds  of  the 
Company  issued  prior  to  September  1,  1921,  or  with 
bonds  issued  under  this  Indenture  prior  to  the  date 
of  said  certificate,  and  have  not  been  included  in 
whole  or  in  part  in  any  preceding  certificate  made 
the  basis  of  any  other  issue  of  bonds  hereunder;  and 
that  no  First  Mortgage  Bonds  have  been  certified 
and  issued  since  September  1,  1921,  on  account  of 
said  additional  property,  etc.,  in  excess  of  S0%  of  the 
reasonable  value  (not  to  exceed  the  actual  cost) 
thereof  to  the  Company; 

( e ) That  the  bonds  called  for  by  said  order  are 
not  on  account  of  any  expenditures  made  out  of  any 
insurance  money  or  out  of  the  proceeds  of  the  sale  of 
any  property  mortgaged  by  any  mortgage  of  the 
Company  or  out  of  the  Improvement  Fund  referred 
to  in  Article  Three  hereof. 

(/)  That  renewals  or  substitutions  for  previously 
existing  property  have  been  treated  as  permanent 
extensions,  improvements,  additions  or  betterments 
only  so  far  as  the  reasonable  value  not  exceeding 
the  actual  cost  of  such  renewals  or  substitutions 
exceeded  the  cost  when  new  of  the  things  re- 
newed or  substituted  for,  and  that  in  no  case  has 
any  expense  for  maintenance,  repairs  or  renewals — 
which  in  the  proper  practice  of  companies  carrying 
on  a business  similar  to  that  carried  on  by  the 


17 


Company  are  charged  to  operating  expenses — been 
treated  as  a permanent  extension,  improvement,  ad- 
dition or  betterment,  and  that  nothing  has  been 
treated  as  a betterment  or  improvement  which  with 
proper  regard  to  the  nature  and  conditions  of  the 
properties  ought  to  have  been  considered  as  a repair, 
replacement,  off-set  to  depreciation,  renewal  or  other 
operating  expense. 

(3)  a certificate  signed  by  the  President  or  a Vice- 
President  and  the  Treasurer  or  an  Assistant  Treasurer  of 
the  Company  setting  forth 

(a)  the  amount  of  the  Company’s  gross  earnings 
and  operating  expenses  as  in  this  Article  required  for 
said  period  of  twelve  (12)  months  and,  where  said 
earnings  include  the  earnings  of  any  additional  plant 
or  property  under  the  provisions  of  Section  4 of 
this  Article,  a statement  that  said  additional  plant 
or  property  has  an  earning  capacity  at  the  time  of 
the  application  and  a separate  statement  of  the 
amount  of  gross  earnings  and  operating  expenses  of 
said  additional  plant  or  property; 

(b)  the  amount  of  the  annual  interest  charges  on 
all  bonds  hereby  secured  and  then  outstanding  and 
on  the  bonds  which  it  is  then  intended  to  certify; 

(c)  the  amount  of  the  annual  interest  charges 
on  (1)  all  First  Mortgage  Bonds  of  the  Company  at 
the  time  outstanding,  and  (2)  all  First  Mortgage 
Bonds,  in  addition  to  those  then  outstanding,  issuable 
on  account  of  any  additional  property  acquired 
prior  to  the  termination  of  said  period  of  twelve  (12) 
months  and/or  on  account  of  the  same  additional 
property  on  account  of  which  bonds  are  then  to  be 
certified  hereunder. 


18 


( d ) the  amount  of  the  annual  interest  charges 
on  (1)  all  other  secured  indebtedness  of  the  Com- 
pany and  charges  against  its  properties  the  lien  or 
liens  of  which  shall  be  prior  to  the  lien  securing  the 
pledged  bonds  and  (2)  all  secured  indebtedness 
against  any  new  or  additional  plant  or  property  the 
earnings  of  which  are  included  in  computing  the 
earnings  of  the  Company  for  the  purpose  of  obtain- 
ing the  certification  and  delivery  of  bonds  hereunder 
as  provided  in  Section  4 of  this  Article,  the  lien  or 
liens  of  which  indebtedness  will  be  prior  to  the  lien 
of  the  pledged  bonds,  after  such  plant  or  property 
shall  have  been  acquired  by  the  Company. 

(4)  An  opinion  signed  by  counsel  satisfactory  to  the 
Trustee  (who  may  be  the  counsel  of  the  Company)  stating 
that  said  additional  property  or  permanent  extensions, 
improvements,  additions  or  betterments  have  been  legally 
acquired  by  the  Company;  that  it  has  good  marketable 
title  thereto  and  that  the  same  is  free  from  all  liens,  in- 
cumbrances and  easements,  except  as  therein  stated.  Said 
opinion  shall  also  state  that  the  lien  of  the  Company's 
General  Mortgage  on  said  additional  property,  permanent 
extensions,  improvements,  additions  or  betterments  is  a 
valid  lien  of  record,  perfected  by  such  recording  as  in 
the  opinion  of  such  counsel  is  needed,  subject  only  to 
the  liens  of  the  Company’s  First  Mortgage  and  of  any 
mortgages  or  liens  existing  against  such  additional  prop- 
erty at  the  time  of  acquisition,  and  shall  also  state  that 
no  authorization  for  the  issue  of  the  bonds  called  for  by 
said  order  at  the  time  is  required  by  law  to  be  given  by 
any  public  service  commission  or  other  governmental 
body  except  as  in  said  opinion  specified,  together  with 
a copy,  authenticated  in  manner  satisfactory  to  the  Trus- 
tee, of  such  authorization,  if  any,  specified  in  said  opinion. 


19 


$ec.  f).  The  Company  shall  not  be  entitled  to  the  deliv- 
ery of  any  of  the  additional  bonds  under  the  provisions  of 
Section  3 of  this  Article  Two  when  the  Company 
shall  to  the  knowledge  of  the  Trustee  be  in  default  in 
respect  to  any  covenant  or  agreement  contained  in  this 
Indenture. 

Sec.  7.  In  case  the  Company  shall  at  any  time  after 
September  1, 1921,  acquire  any  property  subject  to  any  ex- 
isting lien  prior  to  the  lien  of  the  Company’s  General 
Mortgage,  the  Company  shall  be  entitled  to  have  authen- 
ticated bonds  under  the  provisions  of  Section  3 of  this 
Article  equal  in  principal  amount  to  20%  of  the  reason- 
able value  (not  to  exceed  the  actual  cost)  of  such  prop- 
erty to  the  Company  if  such  prior  lien  were  paid  off 
and  discharged,  but  only  provided  that  out  of  the 
First  Mortgage  Bonds  of  the  Company  authenticated 
by  the  trustee  under  said  First  Mortgage  in  connection 
with  such  acquisition,  bonds  equal  at  par  to  the  prin- 
cipal amount  of  every  such  existing  prior  lien  or  in- 
debtedness shall  have  been  withheld  by  said  trustee 
under  the  Company’s  First  Mortgage  pending  the  pay- 
ment of  such  secured  indebtedness,  of  which  fact  the 
certificate  of  such  trustee  shall  be  conclusive  evidence, 
and  provided  further,  that  in  no  case  shall  bonds 
be  certified  under  the  provisions  of  this  Section  on  ac- 
count of  property  which  shall  at  the  time  be  subject 
to  any  lien  prior  to  the  lien  of  the  Company’s  General 
Mortgage,  if  there  be  any  interest  due  and  unpaid  upon 
the  indebtedness  secured  by  said  prior  lien  other  than 
interest  for  the  current  period  not  exceeding  six  (6) 
months.  The  affidavit  of  the  President  or  a Vice-Presi- 
dent of  the  Company  showing  that  th'ere  is  no  such  inter- 
est so  due  or  unpaid  shall  be  sufficient  evidence  of  the  fact. 


20 


Sec.  8.  The  said  written  order  and  certified  copy 
of  the  resolution  of  the  Board  of  Directors  or  Executive 
Committee,  the  certificate  of  the  President  or  a Vice-Presi- 
dent and  the  Treasurer  or  an  Assistant  Treasurer,  the 
certificate  of  the  Engineer  and  the  opinion  of  counsel  as 
provided  for  in  Section  5 of  this  Article  (together, 
in  a proper  case,  with  the  certificate  and  affidavit  pro- 
vided for  in  Section  7 of  this  Article)  shall  constitute 
sufficient  warrant,  direction  and  justification  to  the  Trus- 
tee for  certifying  and  delivering  any  of  the  bonds  required 
of  it  under  Section  3 of  this  Article,  and  shall  constitute 
due  and  sufficient  evidence  of  the  facts  therein  stated,  and 
no  duty  or  obligation  is  imposed  upon  the  Trustee  to  look 
behind  such  documents. 


ARTICLE  THREE 

Section  1.  In  addition  to  the  sinking  fund  require- 
ments under  the  Company’s  First  Mortgage,  the  Com- 
pany covenants  that  in  the  event  that  and  so  long  as  there 
shall  be  issued  and  outstanding  hereunder  bonds  in  excess 
of  the  principal  amount  of  $3,500,000,  it  will  pay  to  the 
Trustee,  on  the  first  day  of  August  in  each  year,  in  United 
States  gold  coin  of  the  present  standard  of  weight  and 
fineness,  or  its  equivalent,  a sum  equal  to  three  and  one- 
third  per  cent.  (3%%)  of  the  aggregate  principal 
amount  of  such  bonds  in  excess  of  said  principal  amount 
of  $3,500,000  issued  and  outstanding  on  the  said  first 
day  of  August.  The  sums  paid  to  the  Trustee  under  this 
Article  shall  constitute  a fund  to  be  known  as  an  Im- 
provement Fund,  and  shall  be  held  by  the  Trustee  until 
applied  as  hereinafter  provided,  such  interest  being  al- 
lowed thereon  as  the  Trustee  shall  allow  on  ordinary 
deposit  accounts. 


21 


Sec.  2.  Such  Improvement  Fund  shall  he  paid  out  by 
the  Trustee  from  time  to  time  upon  the  request  of  the 
Company,  expressed  hy  resolution  of  its  Board  of  Direc- 
tors or  Executive  Committee,  and  upon  receipt,  in  each 
case,  of  a certificate  signed  and  verified  by  the  President 
or  a Vice-President  of  the  Company  and  hy  an  engineer 
appointed  hy  its  Board  of  Directors  and  approved  hy 
the  Trustee,  who  may  be  an  engineer  of  the  Company, 
stating  in  substance : 

(1)  That  the  Company  has  made  permanent  exten- 
sions, additions,  improvements  or  betterments  properly 
chargeable  to  capital  account  of  the  character  described 
in  Section  3 of  Article  Two  of  this  Indenture — describing 
the  same  with  reasonable  detail  and  stating  the  actual 
cash  cost  of  each  item — to  or  about  its  plants  or  proper- 
ties as  they  existed  on  September  1,  1921,  not  included 
in  any  other  certificate  under  this  Article  nor  included 
in  any  certificate  made  under  Article  Two  as  a basis 
for  authentication  of  bonds,  nor  acquired,  made  or  paid 
for  by  exchange,  release,  surrender,  condemnation  or 
other  transfer  of  any  of  the  property  subject  to  the  lien 
securing  the  pledged  bonds,  or  by  the  proceeds  of  any 
such  property  or  of  insurance  thereon,  and  stating  that 
such  items  do  not  include  any  replacement  of  old  or 
worn  out  property,'  except  to  the  extent  of  the  excess 
cost  or  value  thereof  as  defined  in  paragraph  (/)  of 
Section  5 of  Article  Two;  and 

(2)  that  the  reasonable  value  and  the  actual  cash 
cost  to  the  Company  of  said  permanent  extensions,  addi- 
tions, improvements  or  betterments,  are  not  less  than  the 
sum  requested  in  said  resolution  to  be  paid,  or  are  not 
less  than  a smaller  sum  stated  in  the  certificate;  and 
upon  receipt  also  of  an  opinion  of  counsel  of  the  char- 
acter defined  in  sub-division  (4)  of  Section  5 of  Article 


22 


Two  with  respect  to  such  permanent  extensions,  additions, 
improvements  or  betterments. 

Such  resolutions,  certificates  and  opinions  required  by 
this  Section  shall  be  full  authority  to  the  Trustee  for  mak- 
ing payments  out  of  the  Improvement  Fund  to  amounts 
which  do  not  exceed  either  the  amount  requested  in 
the  resolution  to  be  paid  or  the  value  or  the  actual 
cost  as  stated  in  said  certificate,  but  before  making  any 
such  payment  under  this  Section  the  Trustee  may  in 
its  discretion,  and  shall  if  requested  in  writing  so  to 
do  by  the  holders  of  not  less  than  twenty-five  per  cent, 
in  amount  of  the  outstanding  bonds,  and  if  furnished 
with  security  and  indemnity  satisfactory  to  it,  cause  to 
be  made  such  independent  investigation  as  it  may  see  fit, 
and  the  expense  thereof  shall  be  paid  by  the  Company, 
or  if  paid  by  the  Trustee  shall  be  repaid  by  the  Company 
upon  demand,  with  interest  at  the  rate  of  six  per  cent. 
(6%)  per  annum;  and  if  on  such  investigation  the  Trus- 
tee, acting  by  such  officer  as  it  shall  select,  shall  find  any 
of  the  statements  in  said  certificate  to  be  in  its  opinion 
incorrect,  it  shall  make  such  reduction  in  the  payment  as 
in  its  opinion  the  facts  so  found  require.  The  Trustee 
shall,  however,  be  under  no  duty  to  make  any  such  inves- 
tigation unless  requested  to  do  so  and  indemnified  as 
aforesaid. 

Sec.  3.  At  any  time  the  Trustee  may,  upon  request 
of  the  Company,  expressed  by  resolution  of  its  Board  of 
Directors  or  Executive  Committee,  apply  any  part  of  the 
Improvement  Fund  to  the  purchase  of  bonds  authenti- 
cated hereunder  at  not  more  than  the  principal  amount 
thereof  plus  interest.  Such  purchase  shall  be  made  upon 
the  best  offer  or  offers  received  upon  advertisement  for 
offers  published  by  the  Trustee  at  the  expense  of  the  Com- 
pany once  in  each  of  two  successive  weeks  in  a newspaper 


23 


published  in  the  City  of  New  York,  and  the  Company  may 
make  such  offers  and  may  in  discharge  of  any  such  offer 
deliver  any  bonds  authenticated  hereunder,  whether  pre- 
viously issued  by  it  or  not. 

Sec.  4.  All  bonds  hereby  secured,  purchased  or  other- 
wise acquired  by  or  delivered  to  the  Trustee  for  the  Im- 
provement Fund,  shall  forthwith  be  cancelled  by  the 
Trustee  and  shall  not  be  reissued. 

Sec.  5.  If  the  pledged  bonds  shall  be  sold  either  under 
the  power  of  sale  herein  provided  or  under  decree  of 
court  in  proceedings  for  the  foreclosure  of  this  Indenture, 
then  the  Improvement  Fund  shall  be  added  to  and  dealt 
with  as  if  it  were  part  of  the  proceeds  of  such  sale. 

ARTICLE  FOUR. 

Section  1.  Duly  and  punctually  the  Company  will 
pay  the  interest  and  the  principal  of  the  bonds  issued 
hereunder  at  the  time  and  in  the  manner  specified  in  said 
bonds,  without  deduction  from  either  such  principal  or 
such  interest  for  any  tax  or  taxes  (except  succession  and 
inheritance  taxes  and  except  such  portion  of  any  Fed- 
eral Income  Tax  with  respect  to  income  derived  from 
such  interest  as  shall  be  in  excess  of  two  per  cent.)  which 
the  Company  or  the  Trustee  may  be  authorized  or  re- 
quired to  pay  thereon  or  to  retain  therefrom  under  any 
present  or  future  law  or  requirement  of  the  United 
States  of  America,  or  of  any  State,  county  or  munici- 
pality therein,  the  Company  hereby  agreeing  to  pay  any 
such  tax  or  taxes,  as  in  said  bonds  set  forth. 

Sec.  2.  Upon  application,  the  Company  will  reim- 
burse to  any  holder  or  registered  owner  of  any  bond  the 


24 


Pennsylvania  personal  property  tax  which  may  be  im- 
posed upon  such  bond  or  upon  him  by  reason  of  his 
ownership  thereof,  up  to  but  not  exceeding  four  (4)  mills 
per  annum  on  each  dollar  of  the  face  amount  of  any 
bonds  held  by  him;  provided  that  such  application  shall 
be  made  to  the  Company,  or  to  the  Trustee  with  instruc- 
tions to  transmit  the  same  to  the  Company,  within  thirty 
(30)  days  after  payment  of  such  tax  by  him,  and  that  such 
application  shall  set  forth  the  fact  of  the  ownership  by  the 
applicant  of  any  bonds,  together  with  the  number  or  num- 
bers thereof,  the  residence  of  such  holder  or  registered 
owner  at  the  time  such  tax  was  assessed  against  him  and 
that  such  tax  was  assessed  against  and  paid  by  such 
holder  or  registered  owner  because  of  the  ownership  by 
him  of  such  bonds,  and  provided  further  that  the  Com- 
pany shall  not  have  theretofore  paid  to  the  State  of 
Pennsylvania  or  to  any  county,  municipality  or  other 
political  sub-division  thereof  the  amount  of  such  tax 
applicable  to  the  bond  or  bonds  held  by  the  holder  or 
registered  owner  making  such  application. 

Sec.  3.  The  Company  will  keep  and  perform  each  and 
every  covenant  on  its  part  to  be  kept  and  performed  con- 
tained in  each  of  its  mortgages  hereinabove  mentioned 
and  will  at  all  times  preserve  and  maintain  its  property 
and  every  part  thereof,  together  with  the  fixtures  and 
appurtenances  in  thorough  repair,  working  order  and 
condition. 

Sec.  4.  From  time  to  time  the  Company  promptly 
shall  and  will  pay  and  discharge,  or  cause  to  be  paid  and 
discharged,  all  taxes,  rates,  lawful  levies  or  assessments 
and  charges,  special  or  general,  ordinary  or  extraordi- 
nary, levied  or  imposed  upon  or  in  respect  of  the  pledged 
property,  the  lien  whereof  might  or  could  be  held  to  be 


25 


prior  or  equal  to  the  lien  of  these  presents,  so  that  the 
same  shall  not  fall  into  arrears,  and  so  that  the  priority  of 
this  indenture  of  pledge  shall  be  duly  preserved ; provided , 
however,  that  the  Company,  in  good  faith  and  by  appro- 
priate legal  proceedings,  shall  have  the  right  to  contest 
any  such  tax,  assessment  or  charge,  and  pending  such 
contest  may  delay  or  defer  the  payment  thereof. 

Sec.  5.  The  Company  upon  the  written  request  of  the 
Trustee  will  forthwith  execute,  acknowledge  and  deliver 
all  such  further,  other  and  supplemental  instruments  and 
will  take  all  such  further  action  as  may  reasonably  be 
required  for  better  assuring  and  confirming  unto  the 
Trustee  all  and  singular  the  bonds  and  cash  at  any  time 
pledged  and  assigned  to  the  Trustee  hereunder  or  in- 
tended so  to  be. 

Sec.  6.  The  Company  will  keep  at  the  office  of  The 
New  York  Trust  Company  in  the  City  of  New  York,  a 
register  or  registers  for  the  registration  of  bonds  secured 
hereby;  in  which  the  Company  will  register  as  to  the 
principal  sum  thereof,  subject  to  such  reasonable  regula- 
tions as  it  may  prescribe,  any  such  bonds,  upon  presenta- 
tion for  such  purpose.  After  such  registration,  no  trans- 
fer shall  be  valid  unless  made  on  said  books  by  the 
registered  holder  in  person  or  by  his  duly  authorized 
attorney,  and  similarly  noted  on  the  bond.  The  Trustee 
for  the  time  acting  as  such  hereunder  is  hereby  appointed 
the  bond  registrar  of  the  Company. 

Upon  presentation  of  any  such  registered  bond  at  said 
office  where  such  registration  was  made,  accompanied  by 
delivery  of  a written  instrument  of  transfer  in  a form 
approved  by  the  Company,  executed  by  the  registered 
holder,  such  bond  shall  be  transferred  upon  such  register 
and  such  transfer  shall  be  noted  upon  the  bond.  The 


26 


registered  holder  of  any  such  registered  bond  also  shall 
have  the  right  to  cause  the  same  to  be  discharged  from 
registration,  by  being  in  like  manner  transferred  to 
bearer,  in  which  case  transferability  by  delivery  shall  be 
restored,  and  thereafter  the  principal  of  such  bond  when 
due  shall  be  payable  to  the  person  presenting  the  bond; 
but  any  such  bond  may  again  be  registered  in  the  name  of 
the  holder  with  the  same  effect  as  a first  registration 
thereof.  Successive  registrations  and  transfers  as  afore- 
said may  be  made  from  time  to  time  as  desired ; and  each 
registration  of  any  such  bond  shall  be  noted  thereon. 

Registration  of  any  such  bond,  however,  shall  not 
affect  the  transferability,  by  delivery  merely,  of  any  cou- 
pon thereto  belonging,  and  payment  to  the  bearer  of 
any  such  coupon  shall  discharge  the  Company  in  respect 
of  the  interest  therein  mentioned,  whether  or  not  the 
bond  to  which  such  coupon  appertained  shall  have  been 
registered. 


ARTICLE  FIVE. 

Section  1.  Upon  the  written  order  of  the  Company, 
signed  by  its  President  or  a Vice-President,  and  by  its 
Secretary  or  Treasurer,  under  its  corporate  seal,  accom- 
panied by  a copy  of  a resolution  of  the  Board  of  Directors 
or  Executive  Committee  of  the  Company,  certified  by  the 
Secretary  or  an  Assistant  Secretary  under  its  corporate 
seal,  in  terms  authorizing  such  order,  the  Trustee  (pro- 
vided that  at  that  time  the  Company  is  not,  to  the  knowl- 
edge of  the  Trustee,  in  default  hereunder)  shall  at  any 
time  or  from  time  to  time  release  from  the  lien  and  opera- 
tion of  this  Indenture,  and  shall  deliver  pursuant  to  such 
order,  any  of  the  pledged  bonds,  together  with  all  unma- 
tured  interest  obligations  thereto  appertaining,  but  only 
upon  either  (1)  payment  to  the  Trustee  of  such  sum 


27 


in  cash  for  the  bonds  so  to  be  released  and  delivered  as 
may  be  specified  in  said  resolutions  of  the  Board  of  Di- 
rectors or  Executive  Committee,  provided,  however,  that 
the  sum  so  specified  shall  be  not  less  than  eiglity-four 
(84)  per  cent,  of  the  principal  amount  of  said  pledged 
bonds  so  to  be  released  and  delivered,  or  (2)  receipt  by 
the  Trustee  for  cancellation  as  provided  in  Section  2 of 
this  Article  or  delivery  by  the  Company  to  the  Trustee, 
for  cancellation,  of  such  a number  of  bonds  authenticated 
hereunder,  and  previously  issued  by  the  Company  and 
reacquired  by  it,  with  all  unmatured  interest  obliga- 
tions thereto  appertaining,  that  the  cost  thereof  as  here- 
inafter defined  and  as  specified  in  said  resolutions  of  the 
Board  of  Directors  or  Executive  Committee  shall  be 
equal  to  not  less  than  eighty-four  (84)  per  cent,  of  the 
principal  amount  of  said  pledged  bonds  so  to  be  released 
and  delivered.  \ 

In  the  case  of  a purchase  and  cancellation  of  bonds 
by  the  Trustee  pursuant  to  the  provisions  of  Section  2 
of  this  Article,  such  cost  shall  be  the  price,  exclusive  of 
interest,  at  which  said  bonds  shall  have  been  purchased 
by  the  Trustee.  In'  all  other  cases  the  cost  shall  be  the 
actual  cash  cost  of  said  bonds  to  the  Company,  exclusive 
of  interest,  upon  their  reacquirement  by  the  Company, 
such  cost  however  not  to  exceed  the  principal  amount 
thereof,  all  as  verified  by  an  affidavit  of  the  President  or 
a Vice-President  and  the  Treasurer  or  an  Assistant  Treas- 
urer of  the  Company,  which  affidavit  in  all  such  cases 
shall  accompany  the  order  and  resolution  above 
referred  to. 

The  written  order  signed  and  sealed  as  herein  pro- 
vided, and  the  certified  copy  of  a resolution  of  the  Board 
of  Directors  or  Executive  Committee  of  the  Company  au- 
thorizing the  same  and  specifying  the  cost  of  the  bonds, 
if  any,  received  by  or  delivered  to  the  trustee,  as  here- 


28 


inbefore  defined,  together  with  the  affidavit,  if  any,  re- 
quired by  the  foregoing  provisions,  and  the  payment  to 
the  Trustee  of  the  specified  amount  of  money  or  the 
receipt  by  or  delivery  to  the  Trustee  for  cancellation  of 
the  specified  amount  of  bonds  authenticated  hereunder 
and  then  outstanding,  shall  be  full  authority  to  the  Trus- 
tee for  the  delivery  of  pledged  bonds  held  by  it  hereunder, 
as  required  by  such  order  and  resolution  for  the  princi- 
pal amount  permitted  by  the  provisions  of  this  Section. 

Any  and  all  bonds  hereby  secured,  received  by  the 
Trustee  pursuant  to  the  provisions  of  this  Section,  shall 
forthwith  be  cancelled  by  the  Trustee  and  shall  not  be 
reissued. 

Any  and  all  moneys  received  by  the  Trustee  pursuant 
to  the  provisions  of  this  Section,  shall  be  held  and  ap- 
plied for  the  purposes  and  in  the  manner  expressed  in 
Section  2 of  this  Article  of  this  Indenture,  and,  except 
as  so  applied,  shall  be  held  by  the  Trustee  as  additional 
security  for  the  bonds  hereby  secured. 


Sec.  2.  At  any  time  and  from  time  to  time,  the  Com- 
pany may  give  notice  to  the  Trustee  expressed  by  reso- 
lution of  its  Board  of  Directors  or  Executive  Committee, 
of  the  amount  of  money  which  it  desires  to  apply  to  the 
purchase  of  bonds  authenticated  hereunder  and  then  out- 
standing, and  the  highest  price  per  bond  not  exceeding 
the  principal  amount  thereof,  plus  interest,  that  it  is 
willing  to  pay  therefor.  In  that  event  or  in  the  event 
that  at  any  time  the  Trustee  has  moneys  received  pur- 
suant to  the  provisions  of  Section  1 of  this  Article,  the 
Trustee  shall  invite  offers  of  bonds  by  advertisement 
published  at  the  expense  of  the  Company  once  in  each 
of  two  successive  weeks  in  a newspaper  published  in  the 
City  of  New  York,  specifying  in  said  advertisement  the 
amount  applicable  to  the  purchase  of  bonds  and  the  date 


29 


on  or  prior  to  which  offers  must  be  received  by  the  Trus- 
tee. ATot  later  than  three  days  ensuing  said  date,  the 
Company  in  case  it  shall  have  given  notice  of  an  amount 
of  money  which  it  desired  to  apply  to  the  purchase  of 
bonds,  shall  deposit  with  the  Trustee  an  amount  suffi- 
cient to  purchase  all  bonds  offered  to  it  at  the  lowest 
price  not  exceeding  that  specified  in  such  notice  and  not 
exceeding  in  the  aggregate  the  amount  specified  in  said 
advertisement  as  applicable  to  the  purchase  of  bonds. 
The  Trustee  shall  thereupon  to  the  extent  of  the  moneys 
so  deposited,  and/or  to  the  extent  of  the  moneys  received 
pursuant  to  Section  1 of  this  Article,  purchase  such 
bonds  as  are  offered  to  it  at  the  lowest  price,  provided 
that  in  case  the  Trustee  shall  have  received  a notice 
from  the  Company  as  in  this  Section  provided,  such  price 
shall  not  exceed  that  specified  in  said  notice,  and  in  no 
case  shall  the  Trustee  purchase  bonds  at  a price  in  excess 
of  the  principal  amount  thereof  and  accrued  interest. 
The  Company  may  make  such  offers  and  may  in  dis- 
charge of  any  such  offer  deliver  any  bonds  authenticated 
hereunder,  and  previously  issued  by  the  Company  and 
reacquired  by  it. 

All  bonds  so  purchased  by  the  Trustee  shall  forth- 
with be  cancelled  by  the  Trustee  and  shall  not  be  re- 
issued. 


Sec.  3.  So  long  as  no  default  exists  to  the  knowl- 
edge of  the  Trustee  in  respect  of  any  of  the  covenants, 
stipulations  and  conditions  herein  set  forth  on  the  part  of 
the  Company  to  be  done,  performed  and  observed,  the  Com- 
pany shall  be  entitled  to  receive,  as  they  severally  mature, 
all  coupons  upon  the  pledged  bonds,  if  coupon  bonds,  or 
the  Trustee  shall  execute  such  instruments  as  reasonably 
may  be  required  by  the  Company  and  approved  by  the 
Trustee’s  counsel,  releasing  and  discharging  any  claims 


30 


for  such  matured  interest  on  pledged  bonds,  if  such 
pledged  bonds  have  no  corresponding  coupons  belonging 
thereto. 

Sec.  4.  In  case  the  Company  shall  make  default  in 
the  observance  or  performance  of  any  of  the  covenants  on 
its  part  to  be  observed  or  performed  contained  in  its 
mortgage  securing  the  pledged  bonds,  the  Trustee,  so  long 
as  any  such  default  shall  continue,  and  be  known  to  it  to 
exist,  shall  not  surrender  or  cancel  or  discharge  any 
coupons  or  interest  obligations  appertaining  to  any  of  the 
pledged  bonds,  but  shall  retain  the  same  upon  the  trusts 
of  this  Indenture  as  part  of  the  trust  estate,  for  the  benefit 
of  the  holders  of  the  bonds  secured  by  this  Indenture. 

Upon  such  default,  from  time  to  time,  as  the  holder 
of  such  pledged  bonds  or  coupons,  the  Trustee  may,  and 
upon  the  written  request  of  the  holders  of  not  less  than 
twenty-five  per  cent,  in  amount  of  the  bonds  hereby  se- 
cured then  outstanding,  and  upon  receiving  indemnity, 
satisfactory  to  it,  the  Trustee  shall  exercise  all  or  any  of 
the  rights  and  powers  appertaining  to  it  as  the  holder  of 
such  pledged  bonds  or  coupons  under  the  mortgage 
securing  the  same,  as  the  Trustee,  being  advised  by 
counsel  learned  in  the  law,  shall  deem  most  effectual  to 
protect  and  enforce  its  rights  and  interest  and  the  rights 
and  interest  of  the  holders  of  bonds  issued  hereunder. 

Upon  such  default,  for  all  purposes  whatsoever,  the 
Trustee  shall  be  considered  and  held  to  be  the  legal  owner 
and  holder  of  the  pledged  bonds  and  coupons,  and  shall 
have  and  may  exercise  all  the  rights  of  such  holder  and 
owner,  and  may  take  any  action  or  proceedings  under 
the  mortgage  securing  the  pledged  bonds,  which  could  or 
might  be  taken  by  any  bona  fide  holder  or  owner  of  such 
bonds  and  coupons,  including  the  collection  of  any  cou- 
pons or  interest  obligations  retained  by  it  as  provided  in 
this  Section. 


31 


Sec.  5.  The  Trustee  shall  be  authorized  to  cause  any 
and  all  temporary  bonds  or  coupon  bonds  pledged  with 
and  delivered  to  it  hereunder  to  be  registered  in  its  name, 
as  Trustee  hereunder,  or  in  the  name  or  names  of  its 
nominee  or  nominees,  as  it  may  see  fit. 

Sec.  6.  In  case  any  of  the  pledged  bonds  are  re- 
deemed in  accordance  with  the  terms  of  the  General 
Mortgage  securing  the  same,  then  the  Trustee  shall  hold 
the  moneys  so  received  by  it  upon  such  redemption  upon 
the  trusts  of  this  Indenture  as  part  of  the  trust  estate, 
and  as  security  under  this  Indenture,  and  shall  from  time 
to  time  until  said  moneys  are  applied  as  hereinafter  pro- 
vided invest  and  reinvest  the  same  in  securities  in  which 
a trustee  is  authorized  to  invest  trust  funds  under  the 
laws  of  the  State  of  New  York.  The  Trustee  shall  from 
time  to  time  apply  said  funds  in  the  same  manner  as 
it  is  directed  by  the  provisions  of  Section  2 of  this  Article 
to  apply  the  moneys  received  by  it  under  the  provisions 
of  Section  1 or  Section  2 of  this  Article. 


ARTICLE  SIX. 

Section  1.  In  case  (1)  default  shall  be  made  in  the 
payment  of  any  interest  on  any  of  the  bonds  issued  here- 
under and  any  such  default  shall  continue  for  a period 
of  sixty  days;  or  in  case  (2)  default  shall  be  made  in  the 
payment  of  the  interest,  or  any  part  thereof,  upon  any 
bonds  outstanding  under  the  Company’s  First  Mortgage 
or  under  the  General  Mortgage  securing  said  pledged 
bonds,  and  such  default  shall  continue  for  the  period  of 
sixty  days;  or  in  case  (3)  upon  a default  by  the  Company 
in  any  of  the  covenants  of  either  of  said  mortgages,  the 
trustee  or  trustees  under  such  mortgage  shall  have  de- 
clared due  the  principal  sum  of  the  bonds  secured 


32 


thereby;  or  in  case  (4)  default  shall  be  made  by  the  Com- 
pany in  the  performance  of  any  of  the  covenants  or  un- 
dertakings in  this  Indenture  contained,  and  such  default 
shall  have  continued  for  a period  of  ninety  (90)  days 
after  written  notice  thereof  to  the  Company  by  the  Trus- 
tee, or  by  the  holders  of  twenty-five  per  cent,  in  amount 
of  the  bonds  hereby  secured;  or  in  case  (5)  the  Company 
shall  be  adjudged  a bankrupt,  or  a receiver  of  the  prop- 
erty and  assets  of  the  Company  shall  be  appointed  by 
any  competent  court  and  such  receivership  shall  not  be 
finally  vacated  within  sixty  (60)  days  after  such  appoint- 
ment,— then  and  in  each  and  every  such  case  the  Trustee 
may,  and  upon  the  written  request  of  the  holders  of 
twenty -five  per  cent,  in  amount  of  the  bonds  hereby  secured 
at  such  time  outstanding  the  Trustee  shall,  declare  the 
principal  of  all  bonds  then  outstanding  hereunder  to  be 
due  and  payable  immediately,  and  upon  any  such  declara- 
tion the  same  shall  become  and  shall  be  immediately 
due  and  payable,  anything  in  this  Indenture  or  in  said 
bonds  contained  to  the  contrary  notwithstanding. 

This  provision,  however,  is  subject  to  the  condition 
that  if,  at  any  time  after  the  principal  of  said  bonds  shall 
have  been  so  declared  due  and  payable  and  before  any  sale 
of  the  pledged  bonds  or  any  thereof  shall  have  been  made 
pursuant  to  the  provisions  of  Section  2 of  this  Article, 
all  arrears  of  interest  upon  all  such  bonds  shall  be  paid 
by  the  Company,  and  the  Company  also  shall  have  rem- 
edied any  and  every  default  by  it  theretofore  made  under 
this  Indenture  and  under  either  or  both  of  said  mortgages, 
—then  and  in  every  such  case  the  holders  of  a majority  in 
amount  of  the  bonds  issued  hereunder,  then  outstanding, 
by  written  notice  to  the  Company  and  to  the  Trustee,  may 
rescind  and  annul  such  declaration  and  its  consequences, 
provided,  however,  that  in  case  the  principal  of  any  of  the 
bonds  secured  by  either  of  said  mortgages  shall  have  been 


33 


declared  due  as  aforesaid,  no  such  rescission  or  annul- 
ment shall  be  made  unless  or  until  such  declaration  shall 
have  been  rescinded  or  annulled  by  the  trustee  or  trustees 
under  the  mortgage  securing  the  same  as  provided 
therein ; and  'provided , f urther,  that  no  such  rescission  and 
annulment  shall  extend  to  or  shall  affect  any  subsequent 
default,  or  shall  impair  any  right  consequent  thereon. 

In  case  the  Trustee  shall  have  proceeded  to  enforce 
any  right  under  this  Indenture,  and  such  proceedings 
shall  have  been  discontinued  or  abandoned  because  of 
such  waiver,  or  for  any  other  reason,  or  shall  have  been 
determined  adversely  to  the  Trustee,  then  and  in  every 
such  case  the  Company  and  the  Trustee  shall  be  restored 
respectively  to  their  several  positions  and  rights  here- 
under in  respect  of  the  pledged  bonds,  and  all  rights, 
remedies  and  powers  of  the  Trustee  shall  continue  as 
though  no  such  proceedings  had  been  taken. 

Sec.  2.  In  case  (1)  default  shall  be  made  in  the  pay- 
ment of  any  interest  on  any  of  the  bonds  issued  here- 
under and  any  such  default  shall  continue  for  a period 
of  sixty  days;  or  in  case  (2)  default  shall  be  made  in 
the  due  and  punctual  payment  of  the  principal  of  any 
of  said  bonds  when  the  same  become  due  whether  at 
maturity  or  by  declaration  as  authorized  by  this  inden- 
ture; or  in  case  (3)  default  shall  be  made  in  the  due 
observance  and  performance  of  any  other  covenant  or 
condition  herein  required  to  be  kept  or  performed  by 
the  Company,  and  any  such  last-mentioned  default  shall 
have  continued  for  a period  of  sixty  days  after  written 
notice  thereof  from  the  Trustee  to  the  Company,  then, 
and  in  each  and  every  such  case  of  default  (a)  the 
Trustee,  personally  or  by  attorney,  may  sell  either  all, 
or  from  time  to  time  any  part,  of  the  pledged  bonds, 
and  all  right,  title  and  interest,  claim  and  demand  therein 


34 


and  right  of  redemption  thereof,  which  sale  or  sales,  if 
deemed  best  by  the  Trustee  or  so  directed  in  writing 
by  the  holders  of  a majority  in  amount  of  said  bonds, 
may  be  made  privately,  but  otherwise  shall  be  made  in  the 
City  of  New  York,  State  of  New  York,  either  at  the  New 
York  Stock  Exchange,  according  to  the  rules  and  customs 
thereof,  or  publicly  at  such  other  place  or  places,  and  at 
such  time  or  times,  and  upon  such  terms  as  the  Trustee 
may  fix  and  briefly  specify  in  the  notice  or  notices  of  sale 
to  be  given  by  publication  thereof  in  at  least  two  daily 
newspapers  published  in  the  City  of  New  York,  for  five 
days  in  the  ten  days  next  preceding  such  sale;  or  (b)  the 
Trustee  may  proceed  to  protect  and  to  enforce  its  right 
and  the  rights  of  bondholders  under  this  Indenture,  by  a 
suit  or  suits  in  equity  or  at  law,  whether  for  the  specific 
performance  of  any  covenant  or  agreement  contained 
herein,  or  in  aid  of  the  execution  of  any  power  herein 
granted,  or  for  the  enforcement  of  any  other  appropriate 
legal  or  equitable  remedy,  as  the  Trustee,  being  advised 
by  counsel  learned  in  the  law,  shall  deem  most  effectual 
to  protect  and  enforce  any  of  its  rights  or  duties  here- 
under. 

The  Trustee  may  adjourn  from  time  to  time  any  sale 
by  it  to  be  made  under  the  provisions  of  this  Indenture 
by  announcement  at  the  time  and  place  appointed  for 
such  sale  or  for  such  adjourned  sale  or  sales;  and  with- 
out further  notice  or  publication,  it  may  make  such  sale 
at  the  time  and  place  to  which  the  same  shall  be  so 
adjourned. 

Sec.  3.  Upon  the  written  request  of  the  holders  of 
twenty-five  per  cent,  in  amount  of  the  bonds  hereby  se- 
cured then  outstanding,  in  case  of  the  occurrence  and  the 
continuance  of  default  as  aforesaid,  it  shall  be  the  duty 
of  the  Trustee,  upon  being  indemnified  as  hereinafter  pro- 


35 


vided,  to  take  all  steps  needful  for  the  protection  and  en- 
forcement of  its  rights  and  the  rights  of  the  holders  of  the 
bonds  hereby  secured,  or  to  take  appropriate  judicial  pro- 
ceedings by  action,  suit,  or  otherwise,  as  the  Trustee,  be- 
ing advised  by  counsel  learned  in  the  law,  shall  deem  most 
expedient  in  the  interest  of  the  holders  of  the  bonds  hereby 
secured;  but,  anything  in  this  Indenture  to  the  contrary 
notwithstanding,  the  holders  of  a majority  in  amount 
of  the  bonds  hereby  secured  and  then  outstanding  from 
time  to  time,  shall  have  the  right  in  writing  to  direct 
whether  the  Trustee  shall  proceed  to  sell  all  or  any  of  the 
pledged  securities,  or  shall  proceed  by  suit  in  equity  or 
action  at  law,  or  both,  and  subject  to  the  terms  of  this 
Indenture  to  direct  and  to  control  the  method  and  place 
of  conducting  any  proceedings  for  any  sale  of  the  pledged 
bonds,  or  for  the  foreclosure  hereof,  or  for  a receiver, 
or  any  other  proceedings  hereunder;  but  they  shall  have 
no  right  or  power  to  involve  the  Trustee  in  any  personal 
liability  of  any  kind  to  anybody,  without  first  and  from 
time  to  time  indemnifying  it  to  its  satisfaction,  and  the 
Trustee  shall  have  the  right  to  decline  to  follow  any  such 
direction  which  in  its  opinion,  or  as  it  may  be  advised, 
would  be  unjustly  prejudicial  to  non-assenting  bond- 
holders. 

Sec.  4.  Upon  the  completion  of  any  sale  or  sales  under 
this  Indenture,  the  Trustee  shall  assign,  transfer,  and 
deliver  to  the  accepted  purchaser  or  purchasers  such  of 
the  pledged  bonds  as  shall  have  been  sold  to  such  pur- 
chaser or  purchasers,  and  such  assignment,  transfer 
and  delivery  shall  be  conclusive  evidence  of  the  validity 
of  the  transfer  thereby  effected.  The  Trustee  and  its 
successors  are  hereby  appointed  the  true  and  lawful 
attorney  or  attorneys  irrevocable  of  the  Company,  in 
its  name  and  stead,  to  make  all  necessary  assignments 


3G 


and  transfers  and  deliveries  of  the  pledged  bonds  thus 
sold;  and  for  that  purpose  it  and  they  may  execute  all 
necessary  acts  of  assignment  and  transfer  and  may  sub- 
stitute one  or  more  persons  with  like  power;  the  Com- 
pany hereby  ratifying  and  confirming  all  that  its  said 
attorney  or  attorneys  or  such  substitute  or  substitutes 
shall  lawfully  do  by  virtue  hereof. 

Sec.  5.  The  receipt  of  the  Trustee  for  the  purchase 
money  shall  be  a sufficient  discharge  therefor  to  any 
purchaser  of  the  pledged  bonds  or  any  thereof,  sold  as 
aforesaid;  and  no  such  purchaser  or  his  representatives, 
grantees  or  assigns,  after  paying  such  purchase  money 
and  receiving  such  receipt,  shall  be  bound  to  see  to  the 
application  of  such  purchase  money  upon  or  for  any  trust 
or  purpose  of  this  Indenture,  or  shall  in  any  manner 
whatsoever  be  answerable  for  any  loss,  misapplication 
or  non-application  of  any  such  purchase  money  or  any 
part  thereof,  or  shall  be  bound  to  inquire  as  to  the 
authorization,  necessity,  expediency  or  regularity  of  any 
such  sale  or  sales. 

Sec.  6.  In  case  of  any  such  sale,  whether  made  under 
the  power  of  sale  in  this  Article  granted  or  pursuant  to 
judicial  proceedings,  the  whole  of  the  principal  sums 
of  the  bonds  hereby  secured,  if  not  previously  due,  shall 
at  once  become  due  and  payable,  anything  in  said  bonds 
or  in  this  Indenture  to  the  contrary  notwithstanding. 

Sec.  7.  The  purchase  money,  proceeds  or  avails  of 
any  such  sale,  whether  under  the  power  of  sale  hereby 
granted  or  pursuant  to  judicial  proceedings,  together 
with  all  other  moneys,  if  any,  then  held  by  the  Trustee 
under  this  Indenture,  shall  be  applied  as  follows : 

First.  To  the  payment  of  the  costs  and  expenses 
of  such  sale,  including  a reasonable  compensation 


87 


to  the  Trustee,  its  agents,  attorneys  and  counsel, 
and  of  all  expenses,  liabilities  and  advances  made 
or  incurred  by  the  Trustee  under  this  Indenture; 

Second.  To  the  payment  of  the  whole  amount 
then  owing  or  unpaid  upon  the  bonds  hereby  se- 
cured for  principal  and  interest,  with  interest  at  the 
rate  of  seven  per  cent,  on  overdue  instalments  of 
interest;  or  in  case  such  proceeds  shall  be  insuffi- 
cient to  pay  in  full  the  whole  amount  so  due  and 
unpaid  upon  the  said  bonds,  then  to  the  payment 
of  such  principal  and  interest,  ratably,  without 
preference  or  priority  of  principal  over  interest  or 
of  interest  over  principal,  or  of  any  instalment  of 
interest  over  any  other  instalment  of  interest; 

Third.  To  the  payment  of  the  surplus,  if  any, 
to  the  Company,  its  successors  or  assigns,  or  to 
whosoever  shall  be  lawfully  entitled  to  receive  the 
same. 

Sec.  8.  Upon  any  such  sale  by  the  Trustee  or  pur- 
suant to  judicial  proceedings,  the  Trustee  or  any  bond- 
holder or  any  other  person  may  bid  for  and  may  pur- 
chase the  pledged  bonds  offered  for  sale,  or  any  thereof, 
for  himself  and  without  accountability  in  respect 
thereof,  except  for  payment  of  the  purchase  price;  and  in 
settlement  or  payment  of  the  purchase  price  of  the  pledged 
bonds  so  purchased,  any  purchaser  shall  be  entitled  to  use 
and  apply  any  bonds,  and  any  matured  and  unpaid 
coupons  hereby  secured,  by  presenting  such  bonds  and 
coupons  in  order  that  there  may  be  credited  as  paid 
thereon  the  sums  payable  out  of  the  net  proceeds  of  such 
sale  to  the  holder  of  such  bonds  and  coupons,  as  his 
ratable  share  of  such  net  proceeds,  after  allowing  for  the 
proportion  of  the  total  purchase  price  required  to  be  paid 


38 


in  cash  for  the  purpose  of  paying  costs  anti  expenses  of 
the  sale,  or  otherwise,  under  Section  7 of  this  Article; 
and  thereupon  such  purchaser  shall  be  credited,  on  ac- 
count of  such  purchase  price  payable  by  him,  with,  the 
sums  so  applicable  to  the  payment  of  and  credited  on, 
the  bonds  and  coupons  so  presented. 

Sec.  9.  The  Company  covenants  that  (1)  in  case  de- 
fault shall  be  made  in  the  payment  of  any  interest  on  any 
bond  at  any  time  outstanding  and  secured  by  this  Inden- 
ture, and  such  default  shall  continue  for  a period  of  sixty 
days;  or  (2)  in  case  default  shall  be  made  in  the  pay- 
ment of  the  principal  of  any  such  bond  when  the  same 
shall  become  payable,  whether  at  the  maturity  of  said 
bonds  or  by  declaration  as  authorized  by  this  Indenture, 
or  upon  a sale  as  mentioned  in  Section  6 of  this  Article, — 
then,  upon  demand  of  the  Trustee,  the  Company  will 
pay  to  the  Trustee,  for  the  benefit  of  the  holders  of  the 
bonds  hereby  secured,  then  outstanding,  the  whole  amount 
which  then  shall  have  become  due  and  payable  on  all 
such  bonds  then  outstanding  for  interest  or  principal  or 
both,  as  the  case  may  be ; and,  in  case  the  Company  shall 
fail  to  pay  the  same  forthwith  upon  such  demand,  the 
Trustee  in  its  own  name,  and  as  Trustee  of  an  express 
trust,  shall  be  entitled  to  recover  judgment  for  the  whole 
amount  so  due  and  unpaid. 

The  Trustee  shall  be  entitled  to  recover  judgment  as 
aforesaid,  either  before  or  after  or  during  the  pendency 
of  any  proceedings  for  the  enforcement  of  the  lien  of  this 
Indenture  upon  the  pledged  bonds,  and  the  right  of  the 
Trustee  to  recover  such  judgment  shall  not  be  affected  by 
any  sale  hereunder,  or  by  the  exercise  of  any  other  right, 
power  or  remedy  for  the  enforcement  of  the  provisions  of 
this  Indenture ; and  in  case  of  a sale  of  the  pledged  bonds, 
as  provided  in  this  Article,  and  of  the  application  of 


39 


the  proceeds  of  sale  to  the  payment  of  the  bonds  secured 
hereb}r,  the  Trustee,  in  its  own  name  and  as  trustee  of  an 
express  trust,  shall,  for  the  benefit  of  the  holders  thereof, 
be  entitled  to  enforce  payment  of  and  to  receive  all 
amounts  then  remaining  due  and  unpaid  upon  any  and 
all  of  the  said  bonds  then  outstanding,  and  shall  be 
entitled  to  recover  judgment  for  any  portion  of  the  debt 
remaining  unpaid,  with  interest.  No  recovery  of  any  such 
judgment  by  the  Trustee,  and  no  levy  of  execution  under 
any  such  judgment  upon  the  pledged  bonds,  or  upon  any 
other  property,  shall  in  any  manner  or  to  any  extent 
affect  the  lien  of  this  Indenture  upon  the  pledged  bonds, 
or  any  thereof,  or  any  rights,  powers  or  remedies  of  the 
Trustee  hereunder,  but  such  lien,  rights,  powers  and 
remedies  of  the  Trustee  and  of  the  bondholders  shall  con- 
tinue unimpaired  as  before. 

Any  moneys  thus  collected  by  the  Trustee  under  this 
section  (less  expenses,  Trustee’s  compensation  and  in- 
demnification, and  other  proper  deductions),  shall  be 
applied  by  the  Trustee  toward  payment  of  such  amounts 
then  due  and  payable  upon  such  bonds  ratably  and  with- 
out any  preference  or  priority  of  any  kind,  upon  presen- 
tation of  the  respective  bonds  and  stamping  such  pay- 
ments thereon,  if  partly  paid,  or  upon  cancellation 
thereof,  if  paid  in  full. 

Sec.  10.  No  holder  of  any  bond  hereby  secured  shall 
have  any  right  to  institute  any  suit,  action  or  proceeding 
in  equity  or  at  law  for  the  enforcement  of  this  Indenture, 
or  for  the  execution  of  any  trust  hereof,  or  for  the 
appointment  of  a receiver,  or  for  any  other  remedy  here- 
under, unless  such  holder  previously  shall  have  given  to 
the  Trustee  written  notice  of  such  default  and  of  the 
continuance  thereof,  as  hereinbefore  provided;  nor  un- 
less, also,  the  holders  of  twenty-five  per  cent,  in  amount 


40 


of  the  bonds  hereby  secured,  then  outstanding,  shall  have 
made  written  request  upon  the  Trustee,  and  shall  have 
afforded  to  it  a reasonable  opportunity  either  to  proceed 
to  exercise  the  powers  hereinbefore  granted,  or  to  insti- 
tute such  action,  suit  or  proceeding  in  its  own  name,  nor 
unless,  also,  they  shall  have  offered  to  the  Trustee  security 
and  indemnity  satisfactory  to  it,  against  the  costs,  ex- 
penses and  liabilities  to  be  incurred  therein  or  thereby; 
and  such  notification,  request  and  offer  of  indemnity  are 
hereby  declared,  in  every  such  case,  at  the  option  of  the 
Trustee,  to  be  conditions  precedent  to  the  execution  of 
the  powers  and  trusts  of  this  Indenture,  and  to  any  action 
or  cause  of  action,  or  for  any  remedy  hereunder;  it  being 
understood  and  intended  that  no  one  or  more  holders  of 
bonds  and  coupons  shall  have  any  right  in  any  manner 
whatever  to  affect,  disturb  or  prejudice  the  lien  of  this 
Indenture  by  his  or  their  action,  or  to  enforce  any  right 
hereunder,  except  in  the  manner  herein  provided,  and 
that  all  proceedings  at  law  or  in  equity  shall  be  instituted, 
had  and  maintained  in  the  manner  herein  provided  and 
for  the  equal  benefit  of  all  holders  of  such  outstanding 
bonds  and  coupons. 

All  rights  of  action  under  this  Indenture,  or  under 
any  of  said  bonds,  may  be  enforced  by  the  Trustee  with- 
out the  possession  of  any  of  such  bonds,  or  the  production 
thereof  on  the  trial  or  other  proceedings  relative  thereto, 
and  any  such  suit  or  proceedings  instituted  by  the  Trus- 
tee shall  be  brought  in  its  name  as  Trustee,  and  any 
recovery  of  judgment  shall  be  for  the  ratable  benefit 
of  the  holders  of  said  bonds. 

Sec.  11.  No  delay  or  omission  of  the  Trustee,  or  of 
any  holder  of  any  bonds  hereby  secured,  to  exercise  any 
right  or  power  accruing  upon  any  default  occurring  and 
continuing  as  aforesaid,  shall  impair  any  such  right  or 


41 


power,  or  shall  be  construed  to  be  a waiver  of  any  such 
default,  or  an  acquiescence  therein ; and  every  power  and 
remedy  given  by  this  Article  to  the  Trustee,  or  to  the 
bondholders,  may  be  exercised  from  time  to  time,  and  as 
often  as  shall  be  deemed  expedient,  by  the  Trustee  or  by 
the  bondholders. 

Sec.  12.  Except  as  herein  expressly  provided  to  the 
contrary,  no  remedy  herein  conferred  upon  or  reserved 
to  the  Trustee,  or  to  the  holders  of  bonds  hereby  secured, 
is  intended  to  be  exclusive  of  any  other  remedy  or  rem- 
edies, and  each  and  every  such  remedy  shall  be  cumula- 
tive, and  shall  be  in  addition  to  every  other  remedy  given 
hereunder  or  now  or  hereafter  existing  at  law  or  in  equity 
or  by  statute. 

ARTICLE  SEVEN. 

Each  of  the  bonds  secured  hereby  is  issued  upon  the 
express  condition,  to  which  each  successive  holder  thereof 
expressly  assents,  and  by  receiving  the  same  agrees,  that 
no  recourse  under  or  upon  any  obligation,  covenant  or 
agreement  of  this  Indenture  or  of  any  bond  hereby  secured 
or  because  of  the  creation  of  any  indebtedness  hereby 
secured,  shall  be  had  against  any  incorporator,  stock- 
holder, officer  or  director  of  the  Company,  or  of  any 
successor  corporation,  either  directly  or  through  the 
Company,  by  the  enforcement  of  any  assessment  or  by 
any  legal  or  equitable  proceeding  by  virtue  of  any  statute 
or  otherwise;  it  being  expressly  understood  that  this 
Indenture,  and  the  obligations  hereby  secured,  are  solely 
corporate  obligations,  and  that  no  personal  liability 
whatever  shall  attach  to,  or  be  incurred  by,  the  incor- 
porators, stockholders,  officers  or  directors  of  the  Com- 
pany, or  of  any  successor  corporation,  or  any  of  them, 
because  of  the  creation  of  the  indebtedness  hereby  author- 


42 


ized,  or  under  or  by  reason  of  the  obligations,  covenants 
or  agreements  contained  in  this  Indenture,  or  in  any  of 
the  bonds  or  coupons  hereby  secured,  or  implied  there- 
from; and  that  any  and  all  personal  liability  of  every 
name  and  nature,  whether  at  common  law  or  in  equity 
or  by  statute,  of  every  such  incorporator,  stockholder, 
officer  or  director,  is  hereby  expressly  waived  as  a con- 
dition of,  and  as  a consideration  for,  the  execution  of 
this  Indenture  and  the  execution  and  issue  of  such  bonds 
and  coupons. 


ARTICLE  EIGHT. 

Section  1.  Any  request  or  other  instrument,  provided 
by  this  Indenture  to  be  signed  and  executed  by  bond- 
holders, may  be  in  any  number  of  concurrent  instruments 
of  similar  tenor,  and  may  be  signed  or  executed  by  such 
bondholders  in  person,  or  by  agent  appointed  in  writing. 
Proof  of  the  execution  of  any  such  request  or  other  instru- 
ment, or  of  a writing  appointing  any  such  agent,  and  of 
the  holding  by  any  person  of  any  of  said  bonds,  shall  be 
sufficient  for  any  purpose  of  this  Indenture,  and  shall  be 
conclusive  in  favor  of  the  Trustee  and  against  the  Com- 
pany with  regard  to  due  action  taken  by  it  under  such 
request  or  other  instrument,  if  made  in  the  manner 
specified  in  this  Article. 

The  fact  and  date  of  the  execution  by  any  person  of 
any  such  request,  or  other  instrument,  or  writing,  may 
be  proved  by  the  certificate  of  any  notary  public,  or  other 
officer  authorized  to  take  acknowledgments  of  deeds  to 
be  recorded  in  New  York,  that  the  person  whose  name 
was  subscribed  to  such  request  or  other  instrument 
acknowledged  to  him  the  execution  thereof,  or  by  an 
affidavit  of  a witness  to  such  execution. 

The  fact  of  the  holding  of  any  of  said  bonds  by  any 
person  executing  any  such  request  or  other  instrument 


43 


as  a bondholder,  and  the  amounts  and  distinctive  serial 
numbers  of  the  bonds  held  by  such  person,  and  the  date 
of  his  holding  the  same,  may  be  proved  by  a certificate 
executed  by  any  trust  company,  bank,  bankers  or  other 
depositary  (wherever  situated),  if  such  certificate  shall 
be  deemed  by  the  Trustee  to  be  satisfactory,  showing 
therein  that  at  the  date  therein  mentioned  such  person 
had  on  deposit  with  such  depositary  the  bonds  described 
in  such  certificate;  provided  such  bonds  be  not  registered. 
The  fact  of  the  holding  of  a registered  bond  and  the  dis- 
tinctive serial  number  thereof  and  the  date  of  holding 
the  same  shall  be  proved  by  the  books  of  the  Company  for 
the  registry  of  such  bonds. 

Sec.  2.  The  Company  and  the  Trustee  may  deem  and 
treat  the  bearer  of  any  bond  not  registered  or  of  any  cou- 
pon, hereby  secured,  as  the  absolute  owner  of  such  bond 
or  coupon,  as  the  case  may  be,  and  may  also  treat  the 
registered  holder  of  any  such  bond  as  the  absolute  owner 
thereof,  for  the  purpose  of  receiving  payment  thereof  and 
for  all  other  purposes;  and  neither  the  Company  nor  the 
Trustee  shall  be  affected  by  any  notice  to  the  contrary. 

ARTICLE  NINE. 

Section  1.  The  Trustee  shall  not  be  answerable  for 
the  default  or  misconduct  of  any  agent  or  attorney  ap- 
pointed by  it  in  pursuance  hereof,  if  such  agent  or  attor- 
ney shall  have  been  selected  with  reasonable  care;  or  for 
anything  whatever  in  connection  with  this  trust,  except 
willful  misconduct  or  gross  negligence.  The  Trustee 
shall  not  be  under  any  obligation  to  take  any  action  to- 
wards the  execution  or  the  enforcement  of  the  trusts 
hereby  created,  which,  in  its  opinion,  will  be  likely  to  in- 
volve it  in  expense  or  liability  unless  one  or  more  of  the 


44 


holders  of  the  bonds  hereby  secured  shall,  as  often  as 
required  by  the  Trustee,  furnish  indemnity  satisfactory  to 
the  Trustee  against  such  expense  or  liability;  nor  shall 
the  Trustee  be  required  to  take  or  be  deemed  to  have 
notice  of  any  default  hereunder,  or  any  default  in  the 
indenture  under  which  the  pledged  bonds  were  issued, 
unless  notified  in  writing  of  such  default  by  the  holders  of 
at  least  five  per  cent,  in  amount  of  the  bonds  hereby 
secured  then  outstanding,  or  to  take  any  action  in  respect 
of  any  default  unless  requested  to  take  action  in  respect 
thereof  by  a writing  signed  by  the  holders  of  not  less  than 
twenty-five  per  cent,  in  amount  of  the  bonds  hereby  se- 
cured, then  outstanding,  and  tendered  indemnity  satis- 
factory to  it  as  aforesaid,  anything  herein  contained  to 
the  contrary  notwithstanding;  but  the  foregoing  pro- 
visions of  this  Section  are  intended  only  for  the  protection 
of  the  Trustee,  and  shall  not  be  construed  to  limit  or  to 
affect  any  discretion  or  power  by  any  provision  of  this 
Indenture  given  to  the  Trustee  to  determine  whether  or 
not  it  shall  take  action  in  respect  of  any  default,  or  any 
power  or  discretion  of  the  Trustee  to  take  action  in  respect 
of  any  default  without  such  notice  or  request  from  bond- 
holders. 

Any  action  taken  by  the  Trustee  upon  the  request  of 
any  person  who  at  the  time  is  the  owner  of  any  such  bond 
or  bonds  shall  be  conclusive  and  binding  upon  all  future 
owners  of  the  same  bond  or  bonds. 

The  Trustee  shall  incur  no  liability  to  anybody  in 
acting  upon  any  notice,  request,  order,  copy  of  a resolu- 
tion, consent,  certificate,  bond,  note,  document  or  paper- 
believed  by  it  to  be  genuine  and  to  have  been  signed  by 
the  proper  person. 

The  recitals  and  statements  herein  and  in  said  bonds 
contained  shall  be  taken  as  statements  by  the  party  of 
the  first  part  and  shall  not  be  considered  as  made  by  or 


45 


as  imposing  obligation  or  liability  upon  the  Trustee,  nor 
shall  the  Trustee  be  held  responsible  for  the  legality  or 
validity  of  said  bonds  in  any  respect  whatsoever,  or 
obliged  to  see  that  proper  authority  is  obtained  for  the 
issuance  of  any  of  said  bonds  or  pledged  bonds  from  any 
Board  or  Commission  of  any  State  or  to  see  to  the  record- 
ing, registry  or  filing  of  this  Indenture,  or  re-recording 
re-registry  or  refiling  of  the  same,  or  to  inquire  as  to  or 
pay  any  taxes,  charges  or  assessments  or  liens  in  respect 
to  the  bonds  or  pledged  bonds. 

The  Trustee  may  become  the  owner  of  bonds  secured 
hereby  with  the  same  rights  which  it  would  have  if  it  were 
not  trustee,  and  at  any  public  sale  of  the  bonds,  pledged 
as  collateral  hereunder,  may  become  the  purchaser 
thereof  without  any  accountability  or  responsibility  ex- 
cept for  the  payment  of  the  purchase  price. 

The  Trustee,  in  its  discretion,  may  advise  with  legal 
counsel  to  be  selected  and  employed  by  it  at  the  expense 
of  the  Company,  and  anything  done  or  suffered  in  good 
faith  by  the  Trustee  in  accordance  with  the  opinion  of 
counsel  shall  be  conclusive  in  favor  of  the  Trustee  as 
against  the  Company  and  all  holders  of  bonds  secured 
hereby. 

The  Trustee  shall  be  entitled  to  reasonable  compensa- 
tion for  all  services  rendered  by  it  in  the  execution  of  the 
trusts  hereby  created,  and  the  Company  agrees  to  pay 
such  compensation  as  well  as  all  expenses  necessarily 
incurred  or  disbursed  by  the  Trustee  hereunder,  from 
time  to  time  upon  demand ; and  for  payment  of  such 
compensation  and  expenses  and  proper  indemnification, 
the  Trustee  shall  have  a first  lien  on  all  the  property 
pledged  hereunder,  paramount  to  the  lien  of  the  bonds 
hereby  secured. 

The  Trustee  shall  be  under  no  duty  or  obligation  to 
see  to  the  application  of  the  proceeds  of  any  bond  issued 
under  this  Indenture. 


46 


Sec.  2.  The  Trustee,  or  any  trustee  hereafter  ap- 
pointed, may  resign,  and  may  be  discharged  of  the  trusts 
created  by  this  Indenture,  by  giving  notice  thereof  to  the 
Company  and  to  the  bondholders,  by  publication,  at  least 
twice  a week,  for  two  successive  weeks,  in  one  news- 
paper at  that  time  published  in  the  City  of  New  York, 
State  of  New  York.  Such  resignation  shall  take  effect 
upon  the  final  publication  of  such  notice,  unless  prior 
thereto  a successor  trustee  shall  have  been  appointed 
as  hereinafter  provided,  in  which  case  it  shall  take  effect 
upon  the  appointment  of  such  successor  trustee. 

Sec.  3.  In  case  at  any  time  said  Trustee,  or  any  trus- 
tee hereafter  appointed,  shall  resign  or  shall  be  removed 
or  otherwise  shall  become  incapable  of  acting,  a successor 
or  successors  may  be  appointed  by  the  holders  of  a ma- 
jority in  amount  of  the  bonds  hereby  secured  then  out- 
standing, by  an  instrument  or  concurrent  instruments 
signed  by  such  bondholders  or  their  attorneys-in-fact  duly 
authorized ; provided,  nevertheless,  and  it  is  hereby  agreed 
and  declared,  that  in  case  at  any  time  there  shall  be  a 
vacancy  in  the  office  of  trustee  hereunder,  the  Company, 
by  an  instrument  executed  by  order  of  its  Board  of  Di- 
rectors, shall  appoint  a trustee  to  fill  such  vacancy  until 
a new  trustee  shall  be  appointed  by  the  bondholders  as 
herein  authorized.  Thereupon  the  Company  shall  pub- 
lish notice  of  such  appointment  once  a week  for  four  suc- 
cessive weeks  in  a daily  newspaper  published  in  the  City 
of  New  York,  State  of  New  York,  but  any  new  trustee 
so  appointed  by  the  Company  shall  immediately  and 
without  further  act  be  superseded  by  a trustee  appointed 
in  the  manner  above  provided  by  the  holders  of  a majority 
in  amount  of  the  bonds  hereby  secured,  if  such  appoint- 
ment by  bondholders  be  made  prior  to  the  expiration  of 
one  year  after  such  publication  of  notice.  Every  such 


47 


trustee  appointed,  shall  always  be  a trust  company  in 
good  standing,  doing  business  in  the  City  of  New  York, 
and  having  a capital  and  surplus  aggregating  at  least 
$2,000,000  if  there  be  such  a trust  company  willing  and 
able  to  accept  the  trust  upon  reasonable  or  customary 
terms. 

Any  such  new  trustee  appointed  hereunder  shall  exe- 
cute and  acknowledge,  and  shall  deliver  to  the  trustee 
last  in  office,  and  also  to  the  Company,  an  instrument 
accepting  such  appointment  hereunder,  and  thereupon 
such  new  trustee,  without  any  further  act,  deed  or  con- 
veyance, shall  become  vested  with  all  the  estates,  prop- 
erties, rights,  powers,  trusts,  duties  and  obligations  of 
its  predecessors  in  the  trust  hereunder  with  like  effect  as 
if  originally  named  as  trustee  herein ; but  nevertheless, 
on  the  written  request  of  the  new  trustee,  the  trustee 
ceasing  to  act  shall  execute  and  deliver  an  instrument 
transferring  to  such  new  trustee,  upon  the  trusts  herein 
expressed,  all  the  estates,  properties,  rights,  powers  and 
trusts  of  the  trustee  so  resigning  or  removed,  and  shall 
duly  assign,  transfer  and  deliver  all  the  bonds  then 
pledged  hereunder,  and  all  other  property  and  moneys 
then  held  hereunder  by  such  trustee,  to  the  new  trustee 
so  appointed  in  its  place,  subject,  nevertheless , to  any  lien 
which  the  retiring  trustee  may  have  pursuant  to  any 
provision  hereof.  Upon  request  of  any  such  new  trustee, 
the  Company  shall  make,  execute,  acknowledge  and  de- 
liver any  and  all  assignments,  conveyances  or  instruments 
in  writing  for  more  fully  and  certainly  vesting  in  and  con- 
firming to  such  new  trustee  all  such  property,  rights, 
powers  and  duties. 

ARTICLE  TEN. 

Section  1.  All  the  covenants,  stipulations,  promises 
and  agreements  in  this  Indenture  contained,  by  or  in  be- 


48 


half  of  the  Company,  shall  bind  its  successors  and  as- 
signs, whether  so  expressed  or  not. 

Sec.  2.  In  case  the  Company  shall  be  consolidated 
or  merged  with  any  other  corporation,  or  shall  sell, 
convey  and  transfer  to  another  corporation,  its  property 
as  an  entirety,  the  successor  corporation  formed  by  such 
consolidation,  or  into  which  the  Company  shall  have 
been  merged,  or  which  shall  have  purchased  and  received 
a conveyance  and  transfer,  as  aforesaid — upon  executing 
an  instrument  satisfactory  to  the  Trustee,  whereby  such 
successor  corporation  shall  assume  the  due  and  punctual 
payment  of  the  principal  and  interest  of  the  bonds  hereby 
secured,  and  the  performance  of  all  the  covenants  and 
conditions  of  this  Indenture  obligatory  on  the  Company— 
shall  succeed  to,  and  be  substituted  for,  the  Company, 
party  of  the  first  part  hereto,  with  the  same  effect  as  if 
it  had  been  named  herein  as  such  party  of  the  first  part. 

Sec.  3.  For  every  purpose  of  this  Indenture,  including 
the  execution,  issue  and  use  of  any  and  all  bonds  hereby 
secured,  the  terms  “Company”  and  “Appalachian  Power 
Company”  include  and  mean  not  only  the  party  of  the 
first  part  hereto,  but  also  any  such  successor  corporation 
formed  by  consolidation  or  otherwise  under  the  laws  of 
Virginia  or  of  any  State  or  States  or  of  the  United  States. 
Every  such  successor  or  purchasing  corporation  shall 
possess,  alid  from  time  to  time  may  exercise,  each  and 
every  right  and  power  hereunder  of  Appalachian  Power 
Company,  in  its  name  or  otherwise. 

Sec.  4.  Any  act  or  proceeding,  by  any  provision  of  this 
Indenture  authorized  or  required  to  be  done  or  performed 
by  any  board  or  officer  of  the  Company,  shall  and  may 
be  done  and  performed  with  like  force  and  effect  by  the 


49 


like  board  or  officer  of  any  corporation  that  shall  at  the 
time  be  such  lawful  sole  successor  or  purchaser  of  the 
Company. 

Sec.  5.  Nevertheless,  before  the  exercise  of  the  powers 
conferred  by  this  Article,  the  Company,  by  instrument 
in  writing  executed  by  authority  of  two-thirds  of  its  board 
of  directors  and  delivered  to  the  Trustee,  may  surrender 
any  of  the  powers  reserved  to  the  Company  or  to  such 
successor  corporation ; and  thereupon  such  power  so  sur- 
rendered shall  terminate. 

Sec.  6.  Except  when  otherwise  indicated,  the  words 
“the  Trustee,”  or  “said  Trustee,”  or  any  other  equivalent 
term,  as  used  in  this  Indenture,  shall  be  held  and  con- 
strued to  mean  the  trustee  or  trustees,  for  the  time  be- 
ing, whether  original  or  successor,  and  the  words  “Trus- 
tee,” “bond,”  “bondholder,”  shall  signify  the  plural  as 
well  as  the  singular  number,  the  word  “amount”  shall 
signify  “principal  amount”  and  the  term  “majority” 
shall  signify  “majority  in  amount,”  whether  or  not  so 
expressed. 

The  New  York  Trust  Company,  Trustee,  party 
hereto  of  the  second  part,  hereby  accepts  the  trusts  in 
this  Indenture  declared  and  provided,  upon  the  terms  and 
conditions  hereof. 

In  witness  whereof,  after  due  corporate  and  other 
proceedings,  Appalachian  Power  Company,  the  party 
hereto  of  the  first  part,  has  caused  this  Indenture  to  be 
signed  by  its  President  or  a Vice-President,  and  its  cor- 
porate seal  to  be  hereunto  affixed  and  attested  by  its  Sec- 
retary or  an  Assistant  Secretary,  and  the  due  execution  of 
these  presents  to  be  proved,  and  The  New  York  Trust 
Company,  the  party  hereto  of  the  second  part,  has  caused 


50 


this  Indenture  to  be  signed  by  a Vice-President  and  its 
corporate  seal  to  be  hereunto  affixed  and  attested  by  its 
Secretary  or  an  Assistant  Secretary,  and  the  due  execu- 
tion of  these  presents  to  be  proved,  all  in  duplicate  as  of 
the  day  and  year  first  above  written. 

Appalachian  Power  Company, 

Bv  C.  N.  Mason 

Vice-President. 


Attest : 

L.  W.  Osborne 

Secretary. 

[corporate 

seal] 


The  New  York  Trust  Company, 

By  H.  W.  Morse 

President. 


Attest : 

A.  C.  Downing  Jr. 

Secretary. 

[corporate 

seal] 

United  States  Internal  Revenue  documentary  stamps 
to  the  amount  of  $1,250,  denoting  payment  of  the  tax 
imposed  by  the  Federal  Revenue  Act  of  1918  on  the  first 
$2,500,000  of  bonds  secured  by  this  Indenture,  have  been 
affixed  to  the  executed  counterpart  of  this  Indenture 
filed  with  The  New  York  Trust  Company  and  have  been 
duly  cancelled. 


51 


State  of  New  York,?  . 

Comity  of  New  York,] 

On  the  28  day  of  Now  in  the  year  One  thousand 
nine  hundred  and  twenty-one,  before  me  personally  came 
C.  N.  Mason,  to  me  known,  avIio,  being  by  me  duly  sworn, 
did  depose  and  say  that  he  resides  in  Montclair,  New 
Jersey;  that  lie  is  a Vice-President  of  Appalachian 
Power  Company,  one  of  the  corporations  described  in 
and  which  executed  the  foregoing  instrument;  that  he 
knows  the  seal  of  said  corporation ; that  the  seal  affixed 
to  said  instrument  is  such  corporate  seal ; that  it  was  so 
affixed  by  order  of  the  Board  of  Directors  of  said  corpo- 
ration, and  that  he  signed  his  name  thereto  by  like  order. 


Forrest  J.  Hyde,  Jr. 

Notary  Public,  New  York  County 
New  York  County  Clerk's  No.  418 
New  York  Register’s  No.  2454 
Commission  expires  March  30th,  1022 


[notarial 

seal] 


State  of  New  York,?  . 

County  of  New  York,  [ 

On  the  29  day  of  Nov.  in  the  year  One  thousand 
nine  hundred  and  twenty-one,  before  me  personally  came 
H.  W.  Morse,  to  me  known,  who  being  by  me  duly  sworn, 
did  depose  and  say  that  he  resides  in  Bronxville,  N.  Y., 
that  he  is  a Vice-President  of  The  New  York  Trust 
Company,  one  of  the  corporations  described  in  and  which 
executed  the  foregoing  instrument;  that  he  knows  the  seal 
of  said  corporation ; that  the  seal  affixed  to  said  instru- 
ment is  such  corporate  seal ; that  it  was  so  affixed  by 
order  of  the  Board  of  Directors  of  said  corporation,  and 
that  he  signed  his  name  thereto  by  like  order. 


[NOTARIAL 

SEAL] 


Forrest  J.  Hyde,  Jr. 

Notary  Public,  New  York  County 
New  York  County  Clerk’s  No.  448 
New  York  Register’s  No.  2454 
Commission  expires  March  30th,  1922 


52 


State  op  !STew  York,) 

County  of  New  York,  \ t0‘wlt : 

I,  Forrest  J.  Hyde,  Jr.,  a Notary  Public  in  and  for  tbe 
State  of  New  York  and  County  of  New  York,  do  cer- 
tify that  C.  N.  Mason,  a Vice-President  of  Appalach- 
ian Power  Company,  whose  name  is  signed  to  the  writing 
above  bearing  date  on  the  first  day  of  August,  1921,  lias 
acknowledged  the  same  before  me  in  my  county  afore- 
said. 

Given  under  mv  hand  and  notarial  seal  this  28  day 
of  Nov.,  1921. 


[ NOTARIAL 
SEAL] 


Forrest  J.  Hyde,  Jr. 

Notary  Public,  New  York  County 
New  York  County  Clerk’s  No.  448 
New  York  Register’s  No.  2454 
Commission  expires  March  30th,  1922 


State  of  New  York,)  . 

County  of  New  York,  ( °'W1  ' 

I,  Forrest  J.  Hyde,  Jr.,  a Notary  Public  in  and  for  the 
State  of  New  York  and  County  of  New  York,  do  hereby 
certify  that  H.  W.  Morse,  a Vice-President  of  The  New 
York  Trust  Company,  whose  name  is  signed  to  the  writ- 
ing above  bearing  date  on  the  first,  day  of  August,  1921, 
lias  acknowledged  the  same  before  me  in  my  county  afore- 
said. 

Given  under  my  hand  and  notarial  seal  this  29  day 
of  Nov.,  1921. 

Forrest  J.  Hyde,  Jr. 

Notary  Public,  New  York  County 
New  York  County  Clerk’s  No.  448 
[notarial  New  York  Register’s  No.  2454 

seal]  Commission  expires  March  30th,  1922 


G6841 


